According to the General Statistics Office, GDP expanded by 8.02% in 2025, with fourth-quarter growth reaching 8.46%. Inflation averaged 3.31%, while the economy’s total size approached US$514 billion. GDP per capita rose to about US$5,026. All 15 key targets for 2025 were met or exceeded, and across the 2021-2025 period, 22 out of 26 major indicators were achieved.

These figures reflect a capacity to weather volatility. However, as the country moves forward, the challenge is no longer simply recovery, but improving the quality of growth.

In an interview, Dr. Chu Thanh Tuan, Associate Program Manager of the Bachelor of Business program at RMIT University Vietnam, said that to achieve double-digit growth and navigate an aging population safely, Vietnam must transition from a model heavily reliant on capital and low-cost labor to one driven by productivity, innovation, effective institutions, and sustainable social welfare.

“That is the real foundation for fast and stable development,” he said.

Growth can no longer rely on capital and land

Asked about the priorities for the new government term from 2026 to 2031, Dr. Tuan described current growth targets as highly ambitious.

Vietnam aims for GDP growth of at least 10% in 2026, with the 14th Party Congress setting a similar average target for the 2026-2030 period. Yet international organizations offer more conservative projections. The World Bank estimates growth at around 6.3% for 2026, while the United Nations places it closer to 6%.

“This gap between policy ambition and international expectations is significant,” he noted. “To bridge it, Vietnam cannot simply continue as before. It must improve the quality of growth.”

External risks, particularly in trade, present another challenge. The Ministry of Industry and Trade has indicated that reciprocal tariffs from the US on Vietnamese goods were once projected at 46%, later adjusted to 20% as of August 1, 2025. While lower than the worst-case scenario, the figure underscores Vietnam’s dependence on external markets, especially the US as its largest export destination.

“In the coming period, growth will not just be about how much we produce, but also where we export, under what tariffs, and how dependent we are on specific markets,” Dr. Tuan said.

A third major issue lies in productivity and innovation. The Organisation for Economic Co-operation and Development (OECD) estimates that total factor productivity (TFP) has contributed just over one-fifth of Vietnam’s growth since 2010, well below the 45% target set for 2021-2025.

In simple terms, growth has relied heavily on expanding investment and labor, while gains from technology, management, skills, and efficiency remain limited. This poses a critical bottleneck, as sustained 10% growth cannot be achieved through capital and land alone.

Another key challenge is the quality of reform implementation. While administrative reform, streamlining government structures, decentralization, and increased public investment are all appropriate directions, uneven execution could lead to strong policies on paper but slow results in practice.

To address this, Dr. Tuan emphasized three practical priorities: clarifying responsibilities at each level, standardizing implementation processes, and building evaluation systems based on outcomes rather than procedures.

“High growth requires not only good policy, but effective execution,” he said.

The risk of growing old before becoming rich

Looking ahead, Vietnam faces a demographic turning point. According to the United Nations Population Fund (UNFPA), by 2036, people aged 60 and above will account for more than 20% of the population, officially making Vietnam an aging society.

The World Bank has repeatedly warned of the risk of “growing old before becoming rich,” where the population ages faster than the economy accumulates wealth and builds social protection systems.

“If we do not prepare now, long-term growth will face pressure from a shrinking young workforce, rising care costs, and increasing public spending on healthcare and pensions,” Dr. Tuan said.

He pointed to South Korea as a key example. Studies by the World Bank and the Korea Development Institute show that the country successfully escaped the middle-income trap by maintaining high growth over decades while continuously upgrading technology, industry, and innovation capacity.

“The lesson is not just to invest more, but to invest selectively in sectors that can lift the entire economy, while improving education, research, and domestic enterprises,” he said.

Taiwan (China) offers another lesson. According to the Brookings Institution, its success depends not only on leadership in semiconductors but also on diversifying products, markets, and growth drivers.

For Vietnam, this means reducing reliance on a few export markets, assembly industries, or foreign-invested sectors, and strengthening domestic private enterprises in areas such as supporting industries, technology, logistics, high-value agriculture, and professional services.

Singapore, meanwhile, demonstrates the importance of effective institutions, investment in human capital, and high-quality governance. Strong education systems, efficient public services, and robust infrastructure have allowed it to sustain growth even as its population ages.

For Vietnam, this lesson is particularly relevant. An aging society with a highly skilled workforce and comprehensive social protection will face very different outcomes compared to one with low productivity and limited coverage.

Data from Vietnam Social Security shows that by the end of 2025, social insurance coverage reached 45.1% of the working-age population, including 38.6% under compulsory schemes and 6.5% under voluntary programs. While this marks progress, it also means more than half of the workforce remains outside formal pension protection.

In summary, Vietnam must act quickly to boost productivity, invest in human capital, support the growth of domestic enterprises, and expand social protection systems.

Only then can it avoid the middle-income trap and reduce the risk of becoming old before it becomes truly prosperous.

Tran Chung