Vietnam’s GDP growth is forecast to reach 9-9.3% this year and could climb an additional 2-3 percentage points if new growth drivers are successfully harnessed, according to Can Van Luc, chief economist at state-owned BIDV bank.
Speaking at a conference on Tuesday, Luc, who also serves on the National Financial and Monetary Policy Advisory Council, warned that global headwinds could dampen Vietnam’s outlook.
Growth may fall to around 9.3% from the 10% target, and could decline further to roughly 9% if US tariffs are taken into account, he said.
He suggested that Vietnam should focus on achieving an average growth of 10% over a five-year span rather than striving for 10% annually, allowing for more flexible policy decisions and reducing the pressure to chase growth at any cost.
“Economic management this year needs to be framed within both short-term objectives and a long-term vision,” he continued.
Luc underscored that growth should be considered over the long term, potentially extending to 2040, 2090, or even 2100. He said Vietnam must both renew its growth model to maintain high rates, a necessary condition, and ensure sustainability, a sufficient condition.
This strategy, he noted, aligns with the four policy directions set by the Communist Party leadership.
Moreover, citing the World Bank’s “3i” framework for developing countries, investment, infusion, and innovation, Luc urged Vietnam to pursue all three simultaneously rather than sequentially, warning that a step-by-step approach would make achieving high-income status by 2045 much more challenging.
Simultaneously promoting investment, technology adoption, and innovation would not only boost production capacity but also generate additional growth momentum over the medium term, he said.
Vietnam’s traditional growth model rests on three main pillars: labour, capital, and total factor productivity (TFP). International experience shows that labour typically accounts for 6–10% of growth, capital 35-40%, and TFP 40-45%. In Vietnam, since 1991, labour has contributed around 14-15%, capital 40-45%, and TFP around 45%, increasing to approximately 47% last year.
To achieve double-digit growth, Luc highlighted that Vietnam must reinforce all three pillars at the same time, likening them to a “three-legged stool.”
In addition, he identified five key areas to boost total factor productivity (TFP): advancing science, technology, digital transformation, and innovation; developing high-quality human resources; enhancing market efficiency and resource allocation; investing in infrastructure and reducing logistics costs; and implementing institutional reforms.
Luc estimated that institutional reforms could contribute roughly 0.5-1 percentage point to growth, while the development of economic hubs and stronger regional linkages could add around 4 percentage points.
Advances in digital transformation, science, and technology could provide an additional 1 percentage point, he said.
“Taken together, new growth drivers could add 2-3 percentage points to GDP growth, providing important headroom to support this year’s target amid persistent external pressures,” Luc added.