Vietnam has strong foundations to become high-income country by 2045: WB

Vietnam has officially moved into the upper-middle-income group after 17 years, marking an important milestone in the country's development.

The achievement reflects decades of sustained reforms, strong economic growth, and steadily improving living standards.

In an interview with Tuoi Tre (Youth) online newspaper, Sherman said achieving high-income status by 2045 will depend on Vietnam's ability to maintain the quality of its economic growth and continue implementing reforms.

As countries move to higher stages of development, the nature of their growth challenges also changes.

She said the next chapter of Vietnam's development will be defined by not only the pace of growth but also its quality.

Sherman said Vietnam's transition to upper-middle-income status could further strengthen international confidence in the country's long-term economic prospects while reinforcing its position as an attractive destination for foreign investment.

Vietnam has consistently ranked among the fastest-growing economies in the region in recent years, driven by stable foreign direct investment inflows, strong export growth, and the continued expansion of domestic services.

While these growth drivers remain important, Sherman said sustaining future growth will increasingly depend on higher productivity, innovation, stronger domestic enterprises, and the economy's ability to generate higher added value.

She noted that Vietnam still faces significant challenges on its path toward becoming a high-income economy.

Under the World Bank's current income classification thresholds, the country's gross national income per capita will need to nearly triple to reach high-income status.

Sherman pointed out that since 1990, only 27 economies have successfully moved from middle-income to high-income status. More than one-third of them benefited from unique advantages, such as joining the European Union or possessing abundant natural resources.

Nevertheless, she said Vietnam has several important strengths, including a young workforce, macroeconomic stability, a strategic location, and, above all, a strong commitment to reform and a proven ability to adapt. These are advantages that many countries do not possess.

To achieve its 2045 ambition, Sherman said Vietnam must address several major challenges, including the widening gap between foreign-invested enterprises and domestic businesses.

While foreign direct investment remains an important growth driver, Vietnam's next stage of development will require strengthening domestic enterprises, particularly small and medium businesses, to foster innovation, create high-quality jobs, and integrate more deeply into global value chains.

She also highlighted public investment as a key growth engine, with Vietnam's planned public investment for the 2026-30 period nearly tripling compared to the previous five-year period.

However, she said the focus should shift from accelerating disbursement to maximizing development impact through better project selection, stronger investment preparation, improved procurement, and effective risk-sharing mechanisms to attract private capital.

Infrastructure will play a central role in Vietnam's next phase of development, Sherman said, but public resources alone will not be sufficient to meet long-term demand.

She called for new approaches to infrastructure financing to attract private investment into well-prepared and financially viable transport, energy, and digital infrastructure projects.

She also stressed the need to diversify sources of financing and reduce dependence on bank lending. Continued capital market reforms, she said, would help allocate resources more efficiently to dynamic businesses, especially small and medium ones.

Sherman added that competitive businesses must be supported by a highly skilled workforce.

Investment in innovation, skills development, and technology adoption will help Vietnamese companies move up global value chains, improve competitiveness, and create more high-quality jobs.

She said improving the legal framework is necessary but not sufficient. Although Vietnam has made significant progress in institutional reforms, sustainable growth ultimately requires coordinated commitment across all levels of government, agencies, and stakeholders.

On July 1, the World Bank officially classified Vietnam as an upper-middle-income country after years of strong economic growth.

According to the World Bank, Vietnam's gross national income per capita reached US$4,970 in 2025, exceeding the $4,636 threshold required for upper-middle-income status.