Vietnam faces crucial test in quest for high-income status
Having reached upper-middle-income status in 2026, Vietnam now faces the greater challenge of sustaining growth through innovation and stronger domestic capabilities to avoid the middle-income trap and achieve its high-income ambitions by 2045. Minister stresses AI's breakthrough role in overcoming middle-income trap High, quality growth key to breaking out middle-income trap
Vietnam achieved upper-middle-income status in 2026, marking a significant milestone in its development journey. However, the country now faces the challenge of sustaining growth and achieving high-income status by 2045. To do so, Vietnam must move beyond traditional growth drivers and innovate its development model. Failure to do so could result in falling into the middle-income trap, despite maintaining a high rate of economic growth.
The World Bank has classified Vietnam as an upper-middle-income country, a status achieved after four decades of economic reform known as Doi Moi. To reach the high-income tier, Vietnam needs to develop a modern industrial base, increase GDP per capita, and boost productivity. The country must focus on technology, domestic enterprise growth, and economic resilience.
While Vietnam has seen a surge in export volume, the domestic sector's contribution to exports is still relatively low. Additionally, there is a skills gap, with many young people lacking digital literacy and problem-solving skills. To overcome these challenges, Vietnam needs to invest in research and development, foster innovation, and enhance the capabilities of domestic enterprises.
Written by urgent.news from SGGP English Edition Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
