At the press conference to release the bank's annual economic publication Asian Development Outlook. (Photo: VNA)

Its flagship annual economic publication Asian Development Outlook (ADO) released on April 9 also highlighted risks to the forecasts, which were finalised before the US announcement of new tariff measures.

“Strong trade, a recovery in export manufacturing, and robust foreign direct investment fueled Vietnam’s economic growth in 2024,” said ADB Country Director for Vietnam Shantanu Chakraborty as quoted by the bank in its related news release. “However, recent US announcements on tariffs, along with other continued global uncertainties, could pose significant challenges to the country’s growth this year.”

As per the release, external uncertainties, such as tariff escalations, reciprocal measures, and ongoing instability in the Middle East, could constrain near- to medium-term global economic growth. Moreover, a slowdown in the US and China – Vietnam’s major trading partner – could further affect economic prospects.

“The Government of Vietnam has initiated an ambitious plan to boost growth, which can help mitigate the significant external risks,” said Chakraborty. “Higher and sustainable economic growth is possible if ongoing, extensive institutional reforms are implemented swiftly and efficiently. Such reforms would stimulate domestic demand, increase governance efficiency in the near term, and consequently promote private sector development over the medium and long term.”

Enhancing Vietnam's participation in global supply chains is a critical policy challenge for the country's development. As global economic dynamics evolve, its advantages in value addition to global supply chains are also shifting. It is important to understand the limitations and challenges associated with broadening its participation in and increasing its added values to global supply chains, to improve the country's economic trajectory and long-term growth potential, said ADB.