Vietnam's economy is projected to expand by 6.1% in 2024 and 6.5% in both 2025 and 2026, according to the World Bank's August ‘Taking Stock’ report, a bi-annual economic assessment of the country.

This forecast factors in a slowdown in manufacturing export growth during the second half of this year, following a 16.9% rebound in the first half, as well as an anticipated decline in global demand in 2024, particularly from the US, Vietnam’s largest export market.

The World Bank expects export growth in Vietnam to strengthen moderately over 2025-2026, driven by a slight improvement in global trade prospects and increased external demand from major trading partners, including the US, the eurozone, and China.

Furthermore, the real estate market is beginning to recover and is expected to rebound by late 2024 and into 2025, aided by the easing of the corporate bond market freeze and the implementation of the new Land Law in August this year. 

With ongoing export growth and signs of a real estate revival, domestic demand is forecast to strengthen in the second half of the year as investor and consumer confidence improves. The World Bank forecasts total real investment and real private consumption to grow by 5.8% and 5.6% in 2024, respectively, The Investor reports.

Additionally, the World Bank expects Vietnam's headline inflation to rise to 4.5% in 2024, up from 3.2% in 2023, driven by ongoing higher food prices.

This forecast accounts for the recent spike in food prices, which has been a major factor in the inflation seen in the first half of the year. Inflation is expected to continue due to ongoing increases in food prices, exacerbated by widespread outbreaks of African swine fever, despite efforts to enhance control and prevention measures.

Despite ongoing conflicts in Ukraine and the Middle East, oil and commodity price inflation is expected to ease throughout this year. The increase in public wages and pensions in July is anticipated to have only a minor effect on headline inflation due to the relatively small proportion of the public sector within overall employment.

Moreover, in the medium term, the World Bank forecasts that inflation in Vietnam will decline to 4% in 2025 and further to 3.5% in 2026.