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World Bank upgrades Vietnam 2026 GDP growth outlook to 7.4 percent

World Bank upgrades Vietnam 2026 GDP growth outlook to 7.4 percent

Driven by accelerating manufacturing output and surging exports of artificial intelligence hardware, Vietnam leads growth across regional economies, according to the WB's update.

The World Bank has upgraded its 2026 GDP growth forecast for Vietnam to 7.4 percent in its East Asia and Pacific Economic Update released October 6, marking the largest upward revision in the region at 1.1 percentage points.

Driven by accelerating manufacturing output and surging exports of artificial intelligence hardware, Vietnam leads growth across regional economies, according to the WB's update.

Vietnam stands out as the top performer in the region, with growth accelerating from 8.02 percent in 2025 to 8.18 percent in the first half of 2026. Industrial production, foreign direct investment, and public investment serve as primary catalysts. Merchandise exports surged 22.4 percent year-on-year in August, spearheaded by electronics and machinery, while implemented foreign direct investment hit a five-year peak.

Hardware and components tied to global AI supply chains drive this trade surge, accounting for over 70 percent of Vietnam’s total export growth. Assembly equipment, including servers, computers, and routers, comprises 60 percent of AI-related export value, primarily supplying final demand in the US. AI-related exports have more than doubled compared to average levels between 2020 and 2022.

Beyond manufacturing, Vietnam demonstrates high agility in adopting AI tools across services, healthcare, and education. Vietnam joins China, Malaysia, and the Philippines as regional emerging economies where personal generative AI adoption approaches the global average of 20 percent. Customized small AI models, such as the Vietnamese-tailored VinaLLaMA, and localized AI language learning applications show strong practical utility. In healthcare, AI image diagnostic tools support resource-constrained hospitals, while local hospitality providers leverage AI tools for targeted marketing and dynamic pricing.

However, global headwinds present macroeconomic challenges. Higher world oil prices sparked by Middle East conflicts increased Vietnam’s nominal oil import value by 36 percent. Rising fuel, housing, and utility costs pushed inflation from 2.5 percent early in the year to 4.24 percent in August, with full-year inflation projected at 4.2 percent.

Import growth outpacing exports due to electronic inventory accumulation, rising semiconductor prices, and elevated fuel costs has pressured foreign exchange reserves, which are projected to drop below two months of import cover in 2026. In response to energy price shocks, the government implemented fuel tax cuts and promoted public transit adoption.

To sustain momentum, fiscal expansion remains active. Public investment targets increased by 45 percent, widening the budget deficit to an estimated 3.7 percent of GDP. Over the 2026-2030 period, public investment plans will focus on energy, transportation, and logistics to bring total national investment toward 40 percent of GDP.

The World Bank emphasizes that translating AI potential into long-term productivity gains requires substantial infrastructure investments, particularly expanding power generation and upgrading transmission grids to meet the heavy energy demands of AI data centers.

Besides the World Bank, other international financial institutions have repeatedly upgraded their full-year forecasts for Vietnam. AMRO projects 2026 growth at 7.5 percent, the ADB raised its forecast to 7.8 percent for 2026, the IMF increased its projection to 8.2 percent, UOB upgraded its outlook to 8.5 percent, and Standard Chartered issued the highest forecast at 9.5 percent.


Source: Phan Duong

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First renewable-powered electric barge advances Vietnam’s green logistics

First renewable-powered electric barge advances Vietnam’s green logistics

Powered entirely by renewable energy, the electric barge connects Nike’s inland consolidation hub in Ho Chi Minh City with the Gemalink deep-water port on a 180-kilometer round-trip route.

A collaborative project to deploy an electric barge between CMA CGM, Nike, and Gemadept was announced on October 29, marking a significant milestone in realizing green transition commitments.

Powered entirely by renewable energy, the electric barge connects Nike’s inland consolidation hub in Ho Chi Minh City with the Gemalink deep-water port on a 180-kilometer round-trip route. The solution is projected to cut approximately 778 tonnes of CO2 emissions annually.

The vessel pairs on-board battery power with Gemalink's on-site solar energy installation, creating an integrated system combining low-emission waterborne transport with renewable power generation. With a carrying capacity exceeding 50,000 TEUs per year, the electric barge offers a substantially more sustainable inland logistics alternative to road freight.

By combining electric transport, dedicated charging infrastructure, and renewable energy generation at Gemalink, this fully electric barge project demonstrates how innovation can turn sustainability ambitions into tangible, real-world solutions, said Mr. Chu Do Cong Khanh, Deputy CEO of Gemadept Corporation and Chairman of Gemalink Deep-Sea Port.

Mr. Khanh expressed high expectations for the model’s scalability, emphasizing its potential to accelerate Vietnam's long-term transition toward a low-carbon logistics network.

As Vietnam’s first fully electric barge project, the initiative stands as a clear testament to multi-stakeholder collaboration across ocean carriers, global brand owners, and port operators pooling expertise to decarbonize global supply chains, noted Ms. Christine Cabau, Executive Vice President of Assets and Operations at CMA CGM.

She highlighted that with strong potential for replication across other geographies, Vietnam is steadily establishing itself as a frontrunner in developing sustainable inland transport solutions while building domestic capacity across the renewable energy sector.

"This electric barge project further solidifies CMA CGM's long-term commitment to Vietnam and Southeast Asia, accelerating the broader transition toward sustainable shipping and logistics," Ms. Cabau said.


Vietnam holds 71 billion-ton CO2 storage potential, unlocking CCUS opportunities in oil and gas

Vietnam holds 71 billion-ton CO2 storage potential, unlocking CCUS opportunities in oil and gas

Vietnam is considered a country with immense potential to develop CCS and CCUS across its petroleum industry, especially via offshore carbon geological storage

Carbon capture and storage (CCS), as well as carbon capture, utilization, and storage (CCUS) technologies, are increasingly recognized as vital pathways in emissions reduction—particularly for hard-to-abate industrial sectors.

Vietnam is considered a country with immense potential to develop CCS and CCUS across its petroleum industry, especially via offshore carbon geological storage. According to assessments, the country possesses among the greatest CO2 storage capacities in Southeast Asia, with a potential of up to 71 billion tonnes of CO2 concentrated primarily across three geological regions…

Speaking at the workshop "Carbon Capture, Utilization, and Storage (CCUS) Technologies: Solutions to Accelerate Net Zero in Vietnam" on October 27, Dr. Nguyen Huu Luong, Senior Expert at the Vietnam Petroleum Institute, noted that current global operational CCUS capacity remains relatively modest, with approximately 64 million tonnes of CO2 being captured.

However, global CCS deployment is forecast to expand rapidly, surging nearly tenfold by 2030 to surpass 500 million tonnes per year.

Globally, there are 77 CCUS projects in commercial operation and 610 under various stages of development, with an anticipated average compound growth rate of nearly 40% through 2030. Key geological formations utilized worldwide for CO2 storage include depleted oil and gas reservoirs, deep saline aquifers, and unminable deep coal seams.

To date, cumulative global injected and stored CO2 stands at around 380 million tonnes.

"This is an extremely modest figure against a theoretical global capacity exceeding 10 trillion tonnes of CO2, demonstrating enormous headroom for growth in this sector," Dr. Luong said.

The International Energy Agency (IEA) has concluded that reaching Net Zero emissions by 2050—moved forward from the previous 2070 horizon—will require an additional 50% expansion in CCUS deployment. In 2023, the IEA also underscored CCUS as an indispensable, mandatory component to achieve Net Zero targets.

For Vietnam, joint research conducted by Petrovietnam (PVN) and the Japan Organization for Metals and Energy Security (JOGMEC) identified Vietnam as possessing among the highest CO2 storage potentials in Southeast Asia, estimated at approximately 71 billion tonnes. This storage capacity is concentrated primarily in three offshore sedimentary basins: the Song Hong Basin (39 billion tonnes), the Nam Con Son Basin (22 billion tonnes), and the Cuu Long Basin (10 billion tonnes). Crucially, Vietnam could capitalize on over 1 billion tonnes of effective storage capacity within depleted oil and gas fields alone.

Vietnam also holds distinct competitive advantages for CCUS, including 34 offshore oil and gas fields whose storage suitability has been preliminarily evaluated by Petrovietnam. Notably, in 2011, Vietnam became the first nation in Southeast Asia to successfully implement CO2 enhanced oil recovery (EOR) injection at the Rang Dong field.

CCUS scope in Vietnam’s decarbonization roadmap

Addressing the workshop, Deputy Minister of Agriculture and Environment Le Trong Yen emphasized that achieving Vietnam’s Net Zero emissions commitment by 2050 necessitates profound transformation across economic growth models—particularly as Vietnam targets ambitious double-digit GDP expansion—as well as production methods and natural resource utilization.

According to the Deputy Minister, this transition must run parallel with ensuring national energy security, ecological integrity, and industrial competitiveness while creating fresh development impetus. Every mitigation solution must be evaluated on scientific rigor, economic feasibility, and Vietnam’s unique practical conditions.

To lay the groundwork for real-world deployment, Mr. Yen called for clearly defining the specific role, positioning, and application scope of CCUS within Vietnam's national decarbonization roadmap. Concurrently, technical standards, scientific benchmarks, and safety protocols across the entire CCUS value chain must be thoroughly clarified.

Industry specialists noted that Vietnam has already established baseline prerequisites for CCUS development. The country possesses concentrated point-source CO2 emissions from power generation and heavy industries, vast offshore geological storage capacity in sedimentary basins and depleted fields, and mature oil and gas expertise, seismic data, and infrastructure that can be repurposed for CO2 transport, injection, and long-term storage.

Furthermore, the gradual emergence of a domestic carbon market, green finance frameworks, and legal improvements governing petroleum operations provide foundational momentum for CCUS execution.

Most notably, the amended Petroleum Law (Law No 10/2026/QH16), adopted by the National Assembly on August 23, 2026, and taking effect on March 1, 2027, introduced specific legal provisions governing carbon capture and storage operations linked to petroleum activities, establishing an initial regulatory cornerstone for field deployment.

Dr. Nguyen Thanh Tung, Deputy Director of the Vietnam Petroleum Institute, assessed that incorporating CCUS provisions into the revised Petroleum Law is a decisive milestone, providing the legal basis to transition from exploratory research toward commercial projects.

However, Dr. Tung stressed that to commercialize CCS/CCUS on an industrial scale, Vietnam must establish comprehensive guidelines covering the full project lifecycle: acreage block awards, investor selection, site characterization, injection licensing, operational monitoring, site closure, and post-closure long-term liability frameworks.

From an international perspective, delegates concluded that under appropriate market conditions, CCS/CCUS provides critical decarbonization pathways for hard-to-abate industries, spurs technological innovation, and enhances the export competitiveness of low-carbon goods. The degree to which mitigation credits are monetized on carbon markets will ultimately hinge on robust legal architectures, baseline carbon accounting methodologies, and stringent measurement, reporting, and verification (MRV) protocols.


Vietnam needs integrated solutions to accelerate clean energy transition: experts

Vietnam needs integrated solutions to accelerate clean energy transition: experts

Vietnam’s favourable conditions for expanding clean energy sources, however, the energy transition still faces significant challenges.

Vietnam’s solar and wind power capacity has expanded significantly, with the two sources accounting for approximately 19% and 7% of the country’s electricity mix, respectively, in 2025, according to Ms. Nguyen Thi Thu Huyen of the Institute of Energy under the Ministry of Industry and Trade.

Speaking at the recent “Clean Energy for a New Era of Growth” forum, Ms. Huyen said the figures highlighted the increasingly important role of renewable energy in Vietnam’s power sector.

Vietnam has favourable conditions for expanding clean energy sources, including onshore and offshore wind, rooftop solar, biomass and emerging energy technologies. Under power development planning scenarios, solar power capacity could reach hundreds of thousands of megawatts, while offshore wind capacity could exceed 100,000MW by 2050.

However, the energy transition faces significant challenges. Growing electricity demand from data centres, artificial intelligence and electrified transport requires reliable, stable and affordable power supplies. Meanwhile, the existing transmission grid, dispatch capabilities and energy storage infrastructure have yet to keep pace with these demands.

Experts at the forum proposed a range of long-term solutions. Dr Vo Tri Thanh, Director of the Institute for Brand and Competitiveness Strategy Research, stressed that the transition to clean energy must follow a roadmap suited to Vietnam’s economic development. Adjustments to power planning should take into account implementation capacity, access to partners and the ability to master technology.

He also highlighted the need for coordinated efforts to address policy and regulatory challenges, mobilise investment, develop energy infrastructure, strengthen technological capabilities and train highly skilled workers.

Dr Mai Duy Thien, Chairman of the Vietnam Clean Energy Association, said expanding clean energy required more than simply increasing power generation capacity. Instead, a comprehensive approach was needed, integrating planning, transmission, distribution, demand-side management and financing.


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