Brian Jeffrey
Vietnam’s Economic Growth Potential
Vietnam is experiencing rapid economic growth, outpacing many countries both regionally and globally. Estimates suggest that by 2025, Vietnam may qualify as an upper-middle-income nation, potentially exceeding Singapore’s economic size by 2029.
A report by the Center for Economics and Business Research (CEBR) from the UK indicates that Vietnam’s GDP is anticipated to hit $450 billion in 2024, advancing to the 34th position globally, a rise from its previous ranking.
Looking ahead to 2029, Vietnam’s GDP is predicted to grow to $676 billion, surpassing Singapore’s expected $656 billion.
CEBR’s forecasts indicate strong economic performance for Vietnam, projecting an annual growth rate of 5.8% over the next five years, tapering to 5.6% from 2030 to 2039.
By 2039, Vietnam’s GDP could reach $1.41 trillion, making it the 25th largest economy worldwide and second in Southeast Asia, trailing only Indonesia, thus surpassing countries like the Philippines, Thailand, Malaysia, and Singapore.
Current Economic Status
According to July 2023 data from the World Bank, Vietnam’s GDP for the year is estimated at around $430 billion, resulting in a per capita income of $4,347.
As of now, Vietnam has not met the criteria for classification as an “upper-middle-income” country.
The World Bank categorizes nations into four income brackets based on per capita income: Low-income: Below $1,135, Lower-middle-income: $1,136–$4,465, Upper-middle-income: $4,466–$13,845, and High-income: Above $13,845.
Projected figures from CEBR suggest that by 2024, Vietnam’s per capita income will reach $4,469, crossing the boundary into upper-middle-income status.
Further projections indicate that by 2025, the GDP per capita could rise to $4,783 (124th worldwide) and reach $6,463 (117th) by 2029, potentially touching $12,727 (100th) by 2039.
Despite Vietnam’s GDP per capita trailing behind other Southeast Asian countries, it is making significant strides. By 2024, Vietnam is set to rank 6th in ASEAN regarding GDP per capita, behind countries such as Singapore, Brunei, Malaysia, Thailand, and Indonesia.
The International Monetary Fund (IMF) anticipates Vietnam will take the 4th spot among the ASEAN-6 by 2026, overtaking Indonesia and the Philippines with a GDP per capita of $6,140.
Investment and Technological Growth
Vietnam is strategically positioned for accelerated economic development, particularly through advancements in technology.
The country has exhibited robust recovery post-pandemic, facilitated by its openness to global trade, numerous trade agreements, and its integral role in the worldwide supply chain.
Attracting foreign direct investment (FDI) is another crucial element spurring Vietnam’s growth, with projections estimating FDI inflows to reach $40 billion in 2024, ranking Vietnam among the top 15 developing nations for FDI.
Prominent global technology companies have recognized Vietnam’s potential, leading to several significant investment announcements:
- Nvidia has selected Vietnam for its third AI research center, alongside the U.S. and Taiwan.
- Google is expanding its operations in Vietnam.
- Foxconn, a primary Apple supplier, has committed $80 million towards chip production in Bac Giang Province.
- Meta and SpaceX are planning substantial investments in Vietnam, with SpaceX committing $1.5 billion and the Trump Organization matching that amount for projects in Hung Yen Province.
This surge in technology-focused investments is likely to elevate Vietnam’s standing in the global economy, strengthening its competitive edge and accelerating its progress towards achieving upper-middle-income status.
