The World Bank recently classified Vietnam into the upper-middle-income group after its Gross National Income (GNI) per capita rose from $4,490 in 2024 to $4,970 in 2025.

Le Duy Binh, executive director of Economica Vietnam, said the primary driver behind Vietnam’s economic achievements over the past four decades is the reform process initiated in 1986. Institutional and economic reforms have enabled Vietnam to select an appropriate growth model, which laid the foundation for subsequent reforms.

From a subsidized, centrally planned economy, Vietnam transitioned into a market economy, opening up both domestic and international markets. This served as a vital cornerstone to boost production, attract investment, and catalyze growth.

Nguyen Huu Huan (University of Economics HCMC) pointed out that Vietnam's elevation to the upper-middle-income bracket results from four major drivers.

First, Vietnam transitioned from a centrally planned economy to a socialist-oriented market economy, gradually opening up trade, attracting foreign investment, and integrating deeply into global value chains.

The second driver stems from integration and export capacities. Vietnam has emerged as an important manufacturing hub in the region. 

The recent global supply chain relocation trend unlocked further opportunities to attract fresh investment capital, expand production, and elevate Vietnam’s standing in international trade.

This achievement also stems from maintaining macroeconomic stability, improving the investment climate, and advancing institutional reforms.

Furthermore, the expansion of the private sector, rapid urbanization, and a growing middle class have become crucial engines of growth.

Keys to the high-income objective

Facing the target of becoming a developed, high-income nation by 2045, Le Duy Binh noted that Vietnam must not rest on its laurels or grow complacent with current outcomes.

He said significant challenges lie ahead, particularly the risk of falling into the "middle-income trap", an issue many economies encounter after entering the upper-middle-income bracket.

Vietnam needs to accelerate reforms initiated in recent times while transforming its growth model to suit a new phase of development. The previous growth model propelled Vietnam from an underdeveloped nation into a developing one, lifting it into the lower-middle-income group, but it will struggle to create breakthroughs in the next stage.

"Vietnam must continuously innovate, further reform the investment and business environments along with institutions, and build a more suitable new growth model to target the goal of becoming a developed, high-income economy," he said.

He emphasized that in this new era, Vietnam can no longer rely primarily on traditional input factors such as cheap labor or natural resources.

"We must constantly innovate, reinvent ourselves, and relentlessly seek new growth drivers. It is these new growth engines, driven by science, technology, innovation, and Total Factor Productivity (TFP), that will serve as the key for Vietnam to advance toward its high-income status," Binh said.

Meanwhile, Huan pointed out that breakthroughs in institutions must come first, creating a transparent business environment, ensuring fair competition, protecting property rights, and unleashing social resources. 

The government should shift further from a regulatory role toward a development-oriented approach, placing businesses and citizens at the center.

Alongside this, Vietnam must enhance labor productivity and human resource quality, focusing on training a highly skilled workforce in fields such as technology, AI, data, semiconductors, logistics, green energy, and international governance. 

Higher education, vocational training, applied research, and university-industry linkages need to receive greater priority.

The expert also highlighted the role of the private sector. In his view, a high-income economy requires domestic enterprises with sufficient technological, governance, and financial capabilities to participate more deeply in global value chains. 

Consequently, conditions must be fostered for enterprises to access long-term capital, land, technology, data, and international markets.

In addition, the country needs to further develop its capital markets, including corporate bonds, investment funds, insurance, green finance and digital finance, to mobilize long-term funding for infrastructure, innovation and the green transition.

He argued that science, technology and innovation must become Vietnam's primary growth engines by promoting research and development, regulatory sandboxes, artificial intelligence, fintech, semiconductors, the digital economy and properly-regulated digital assets.

Finally, economic growth must go hand in hand with the green transition and sustainable development. As major export markets continue tightening standards on carbon emissions, ESG and product traceability, green transformation is no longer simply an environmental requirement - Vietnamese businesses and products need to remain competitive and deepen their participation in global value chains.

Nguyen Le