Vietnam must achieve high growth until 2045 to avoid middle-income trap: Prime Minister

Vietnam must achieve sustainable, high growth until 2045, to overcome the middle-income trap like what Japan, South Korea, and China have done, said Prime Minister Pham Minh Chinh.

The PM made the statement on Friday at a dialogue between the Government and city and provincial leaders.

Previously, on Wednesday, the National Assembly, Vietnam's legislature, set the economic expansion target for 2025 at "8% or more" upon the government's proposal, up from the 6.5-7% approved in November last year.

Other targets include a GDP scale of over $500 billion, GDP per capita of over $5,000, and an average CPI hike of 4.5-5%. The country's GDP in 2024 was estimated at $476.3 billion.

Chinh stressed that achieving the growth goal is an important factor in determining the scale of the economy, per capita income, and the ranking of the economy in the world.

Vietnam's GDP has achieved an average growth rate of 6.4% in nearly 40 years since the Doi moi (reform) was introduced in 1986, so the coming period must see acceleration of growth to achieve the strategic goal set until 2045.

"There is no other way, we must maintain sustainable, high growth continuously from now until 2045," he said, adding that this will help the country overcome the middle income trap and achieve strategic goals in the new era.

The Prime Minister stressed that "if the average growth is only 7% per year, it will be difficult to achieve the above targets," as the economies that have become high-income countries all maintained annual growth rates of around 10% for about 30 years.

Specifically, the Japanese GDP grew 11.5% a year in the period 1951-1973, while it was over 9.6% for South Korea from 1963-1996.

Similarly, mainland China's economic expansion was about 10% per year from 1978 to 2011. The tally for Taiwan was 8.9% from 1952-1989, and it was 8.5% for Singapore from 1961-1997.

The cabinet required all ministries, localities, and enterprises to strive for the target. He noted that the country must increase investment efficiency and improve the disbursement rate of public investment capital.

"The government needs to ensure macroeconomic stability, control inflation, and ensure social security. Vietnam will not sacrifice progress, social justice and the environment to pursue mere economic growth," he told the conference.

Speaking at the conference, Deputy Minister of Planning and Investment Tran Quoc Phuong noted that Vietnam needs to focus on administrative reform, easing investment procedures, and removing obstacles for businesses and projects.

"There should be pilot, breakthrough mechanisms and policies for high technology projects. Relevant authorities must see disbursement of public investment capital as one of the most important political tasks. There also need tax and credit mechanisms and policies to stimulate domestic consumption.

"In addition, the country must effectively exploit opportunities from the 17 signed FTAs, diversify export markets, and create favorable conditions for experts, especially talented foreigners and overseas Vietnamese, to work and develop science and innovation in Vietnam," he highlighted.