Vietnam: Economic and Political Overview
Vietnam is one of the fastest-growing countries in the world, and its economy has shown resilience to trade wars and slower growth rates in neighbouring China. This accelerated economic pace is due to labour shifting from agriculture to manufacturing and services, private investment, a strong tourist sector, higher wages, and accelerating urbanization. Exports constitute an increasingly significant contribution to Vietnam's GDP, and certain sectors such as industrial production, textiles, electronics, and seafood production have been growing rapidly. According to preliminary government data, Vietnam's economy grew by 7.09% in 2024, reaching USD 476.3 billion, accelerating from 5.05% in 2023, driven by strong exports and robust foreign investment inflows. Growth is projected to reach 6.5% in 2025 and 2026, driven by sustained export expansion and improved investor and consumer confidence, although bank asset quality remains a concern amid increasing non-performing loans (World Bank).
As per the latest government projection, Vietnam's 2024 state budget revenue was projected to surpass USD 79.24 billion, 19.1% above the estimate, while expenditure was expected to reach 1.83 quadrillion VND. By year-end, public debt stood at 36-37% of GDP, government debt at 33-34%, and debt repayment at 20-21% of state budget revenue, remaining within the National Assembly's limit. Vietnam's external debt composition remains advantageous, with the majority of debt owed to bilateral and multilateral sources. This structure results in a reduced external debt service burden and bolsters its high external liquidity ratio (Fitch). Over the forecast period, the government is expected to maintain a tight fiscal policy, particularly as the economy returns to a higher growth trajectory. The Consumer Price Index (CPI) increased by 3.63% in 2024 and is forecasted to decrease to 2.6% by 2026 (World Bank).
Vietnam's unemployment rate was 2.24% in 2024, down 0.04 percentage points from 2023, according to the GSO. Urban unemployment stood at 2.53%, while rural areas recorded 2.05%. The jobless rate among those aged 15-24 rose to 7.83%, up 0.3 percentage points year-on-year. By the end of 2024, the workforce aged 15 and above reached 53 million, an increase of 575,400 from the previous year. Over the last decade, poverty declined impressively, dropping from 16.8% to 3.9% and is now below pre-pandemic levels (World Bank). Lastly, the country’s GDP per capita (PPP) was estimated at USD 16,193 in 2024 by the IMF.
| Main Indicators | 2023 (E) | 2024 (E) | 2025 (E) | 2026 (E) | 2027 (E) |
| GDP (billions USD) | 433.70 | 468.49 | 506.43 | 545.10 | 585.99 |
| GDP (Constant Prices, Annual % Change) | 5.0 | 6.1 | 6.1 | 6.0 | 5.9 |
| GDP per Capita (USD) | 4,324 | 4,649 | 4,986 | 5,326 | 5,685 |
| General Government Gross Debt (in % of GDP) | 34.4 | 33.8 | 33.2 | 32.6 | 32.0 |
| Inflation Rate (%) | 3.3 | 4.1 | 3.5 | 3.4 | 3.4 |
| Unemployment Rate (% of the Labour Force) | 2.0 | 2.1 | 2.0 | 2.0 | 2.0 |
| Current Account (billions USD) | 25.09 | 14.03 | 13.75 | 12.69 | 10.79 |
| Current Account (in % of GDP) | 5.8 | 3.0 | 2.7 | 2.3 | 1.8 |
Source: IMF – World Economic Outlook Database, October 2021
Vietnam's economy is diversified, with large state-owned industries in textiles, food, furniture, plastics, paper, tourism, and telecommunications. Agriculture remains a significant contributor, accounting for 12% of GDP and employing 33% of the total workforce (data from World Bank). Major crops include rice, coffee, cashew nuts, corn, pepper, sweet potatoes, peanuts, cotton, rubber, tea, and aquaculture. Vietnam’s agricultural sector closed in 2024 with an export turnover of USD 62.4 billion, reflecting an 18.5% increase compared to 2023. The sector also recorded a trade surplus of USD 18.6 billion, a 53.1% surge from the previous year. Aquatic product exports also showed strong growth, reaching USD 10 billion in value, an increase of 12.7%. This included USD 4 billion from shrimp exports (up 16.7%) and USD 2 billion from tra fish (up 8.9% - official data).
Industry contributes significantly to GDP, representing 37.1% and employing 31.2% of the total workforce. The energy sector, electronics industry, textiles and garments, and automotive industry have seen notable growth. Vietnam has become the third-largest Southeast Asian producer in the oil industry and has experienced rapid expansion in the electronics industry, attracting multinational companies. The manufacturing sector, including textiles and garments, accounts for nearly one-fourth of GDP. The GSO reported that in 2024, the industrial sector's value-added contribution to GDP grew by 8.32%, adding 2.7 percentage points to overall economic growth. Within this, processing and manufacturing rose by 9.83%, contributing 2.49 percentage points; water supply and waste management increased by 9.43%, adding 0.06 percentage points; electricity production and distribution grew by 10.05%, contributing 0.37 percentage points; while mining decreased by 7.87%, reducing growth by 0.21 percentage points.
Services play a crucial role in Vietnam's economy, representing 42.5% of GDP and employing 35.8% of the total workforce. Key sectors include tourism, banking and finance, telecommunications, and retail. Vietnam welcomed 17.58 million foreign tourists in 2024, a 39.5% year-on-year increase, reaching 97.6% of pre-Covid levels. Vietnam’s banking sector had a strong year in 2024, with 12 banks surpassing VND 10 trillion (USD 400 million) in pre-tax profit, reflecting solid credit growth, better asset quality, and improved cost efficiency across the sector.
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
| Employment By Sector (in % of Total Employment) | 33.0 | 31.2 | 35.8 |
| Value Added (in % of GDP) | 12.0 | 37.1 | 42.5 |
| Value Added (Annual % Change) | 3.8 | 3.7 | 6.8 |
Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.
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The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.}}
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Source: Index of Economic Freedom, Heritage Foundation
The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.
Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024
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