The World Bank has forecast Vietnam’s economy will grow at 7.5% this year thanks its economic recovery in the first half.
The economy grew by 7.7% in the second quarter as consumers satisfied pent-up demand and foreign tourist arrivals picked up, the bank said in a report released Monday. It expected inflation to average 3.8% for the year.
But it warned several risks remain, including growth slowdowns and stagflation in Vietnam’s main export markets, further commodity price shocks and continued disruption of global supply chains.
Domestic challenges include continued labor shortages, the risk of higher inflation and heightened financial sector risks, it said.
Carolyn Turk, World Bank country director for Vietnam, said, “To sustain economic growth at the desired rate, Vietnam needs to increase productivity by 2-3% every year.
“International experiences have shown that higher worker productivity can be achieved by investing in the education system, as an important part of a basket of investments and reforms. A competitive workforce will generate much-needed efficiency for Vietnam in the long term.”
The bank said the country needs to transform its higher education system to boost productivity.
To match average higher education enrollment levels in upper-middle economies, 3.8 million Vietnamese students need to be enrolled in higher education institutions, almost twice as many as in 2019.
The International Monetary Fund earlier pegged Vietnam’s growth at 6% while lender HSBC put it at 6.9%.