Workers at a garment company in HCM City. Vietnam may become Asia-Pacific region's fastest growing economy in 2026. (Illustrative image. Source: VNA)

Notably, the WB forecasts Vietnam's GDP growth at 6.3% in 2026. Although this is 0.2 percentage points lower than its earlier projection, Vietnam is expected to lead the region in GDP growth.

It could surpass major economies including Mongolia (6.1%), the Philippines (6%), Thailand (5.1%) and China (4%).

Overall, the WB forecasts GDP growth in the East Asia and Pacific (EAP) region to gradually decline in the years to come, from 4.6% in 2025 to 4.1% in 2026, primarily due to China's economic slowdown.

Excluding China, EAP economies are projected to maintain a growth rate of 4.7% in 2026, driven by strong domestic demand.

In 2024, growth in EAP economies excluding China is estimated at 4.8%, higher than the 4.3% recorded in 2023, supported by the recovery in trade, domestic tourism and internal demand.

The WB highlighted Vietnam as a bright spot in regional economic growth, thanks to its robust export capabilities.

In the near future, the WB warns of potential economic risks for the region, mainly due to global trade uncertainties and China's economic downturn. Other risks include escalating geopolitical tensions and global inflation.

Natural disasters caused by climate change are also expected to continue pressuring regional growth prospects.

Globally, the WB forecasts economic growth at 2.7% for both 2025 and 2026, consistent with the growth rate in 2024.