The World Bank’s decision to reclassify Vietnam as an upper-middle-income country marks a historic milestone, recognizing nearly four decades of the country’s Đổi Mới (Renewal) reforms.
The latest figures tell an encouraging story. Vietnam’s Gross National Income (GNI) per capita increased from US$4,490 in 2024 to US$4,970 in 2025, officially surpassing the threshold for upper-middle-income status.
Over the 2024–2025 period, GDP expanded by approximately 7% and 8%, respectively, exports grew by more than 15%, while GNI per capita increased by an average of around 10% annually during 2021–2025. According to the World Bank, this represents one of the strongest and most sustained growth performances in the region.
The World Bank has also described Vietnam as one of the world’s greatest development success stories in poverty reduction. Within roughly three decades, the share of the population living in extreme poverty fell from nearly half to below 1%.
Per capita income has risen from less than US$700 in the late 1980s to nearly US$5,000 today. Tens of millions of Vietnamese have escaped poverty, secured more stable employment, gained broader access to education, and steadily improved their quality of life.
More importantly, this transformation has fundamentally changed both the daily lives and the aspirations of Vietnamese society.
Where many families once focused simply on having enough food and clothing, an increasing number can now aspire to better housing, invest more in education and healthcare, and save for family travel and other quality-of-life improvements.
A rapidly expanding middle class is also becoming a powerful driver of domestic demand. Beyond fueling consumption, this growing segment of society is raising expectations for better education, healthcare, environmental quality, public services, and more effective governance—creating additional momentum for the economy to continue evolving.
Interestingly, the World Bank had already signaled that this milestone was approaching.
In its Steady Reforms, Stronger Resilience report released in May, the institution noted that Vietnam entered 2026 from a position of considerable strength within ASEAN. GDP growth reached 8% in 2025—the highest in the region—while the economy continued to demonstrate resilience amid global trade uncertainties.
The World Bank also praised what it described as Vietnam’s most ambitious reform agenda since the launch of Đổi Mới. Between 2025 and April 2026 alone, authorities enacted more than 86 laws and approximately 300 decrees aimed at streamlining the state apparatus, removing legal bottlenecks, promoting private-sector development, modernizing tax, customs, and judicial systems, and accelerating digital transformation.
Such reforms do not produce immediate results. However, they are laying the institutional foundation for a more sustainable growth cycle, in which economic expansion depends less on scale and increasingly on stronger institutions and more competitive enterprises.
At the same time, the World Bank does not overlook the challenges ahead.
Its report candidly identifies several structural constraints that Vietnam must address, including the significant gap between domestic firms and foreign-invested enterprises, an underdeveloped capital market, continued reliance on bank credit, and the risk of falling into the middle-income trap if reform momentum weakens.
Encouragingly, the World Bank believes that if Vietnam remains committed to reform, deepens capital market development, improves the efficiency of public investment, and further empowers the private sector, the country can create a “virtuous cycle”: stronger investor confidence stimulates private investment, investment drives economic growth, and sustained growth enhances resilience against future shocks.
This also represents the clearest pathway toward Vietnam’s long-term goal of becoming a high-income economy by 2045.
Achieving upper-middle-income status confirms that the reform path Vietnam embarked upon nearly four decades ago was the right one.
At the same time, it serves as a reminder that the next stage of development will be more demanding. Future growth can no longer rely primarily on inexpensive labor, expanding investment, or increasing production capacity.
To move further, Vietnam will need to depend increasingly on higher productivity, science and technology, innovation, and a stronger domestic private sector capable of generating greater value.
There is good reason for optimism. The achievements recognized by the World Bank today all originated from reforms that once appeared extraordinarily difficult nearly forty years ago.
If Vietnam can sustain that same spirit of reform, reaching upper-middle-income status will not be the destination—it will be the launching pad for the country’s journey toward becoming a high-income nation by 2045.
