Vietnam's economy grows strongly in 2024, paving the way for a positive 2025

Vietnam's economy grows impressively

According to recently released data from the General Statistics Office, in the fourth quarter of 2024, gross domestic product (GDP) is estimated to increase by 7.55% over the same period last year.

This growth rate is estimated to be only lower than the fourth quarter of 2017 and 2018 in the 2011-2024 period, maintaining the trend of each quarter being higher than the previous quarter (first quarter increased by 5.98%, second quarter increased by 7.25%, third quarter increased by 7.43%).

Overall, GDP in 2024 is estimated to increase by 7.09% over the previous year, only lower than the growth rates of 2018, 2019 and 2022 in the 2011-2024 period.

Vietnam's economic growth of over 7% is a bright spot in the context of a difficult global economy with low growth in many countries.

With impressive economic achievements in 2024, Vietnam's GDP growth continues to be forecast positively by organizations.

The Asian Development Bank (ADB) revised Vietnam's GDP growth to 6.6% from its previous forecast of 6.2% late last year, the highest GDP growth in Southeast Asia. According to ADB, Vietnam's GDP in 2025 could grow impressively thanks to a strong recovery in manufacturing, trade, and supportive fiscal measures.

Similarly, the World Bank (WB) raised its forecast for Vietnam's economic growth to 6.5% in 2025. Standard Chartered Bank also recently updated its forecast for Vietnam's economic outlook in 2025 as positive with a growth rate of 6.7%.

Seasia Stats – a prestigious statistics site on countries in the Southeast Asian region – forecasts that Vietnam’s economy will rank 12th in Asia in 2025, with an expected economic size of about 506 billion USD. Vietnam is considered one of the manufacturing and trading powers.

Vietnam will continue to attract foreign investment, especially in manufacturing and electronics. Vietnam’s trade agreements and strategic location reinforce its global economic integration, according to data from the International Monetary Fund (IMF).

Moving closer to upper middle income country goal

UOB also raised its forecast for Vietnam’s GDP growth this year to 7% from 6.6%. The decision comes after the economy grew 7.09% last year, far exceeding the market consensus of 6.7% and the target of 6.5%.

UOB expects positive developments from domestic drivers such as manufacturing, consumer spending and tourist arrivals to contribute to performance, especially in the first half of the year.

These factors are compounded by a more positive outlook for the external environment, with UOB expecting the US government, Vietnam’s largest export market, to implement additional tariffs in a more measured and flexible manner.

Vinacapital also forecasts that Vietnam's economic growth next year could reach 6.5% thanks to domestic factors, including increased government infrastructure spending, a recovery in the real estate market and consumer spending.

According to the UK-based Centre for Economics and Business Research (CEBR), in 2025, Vietnam's GDP per capita will reach 4,783 USD, a significant increase compared to 4,469 USD in 2024, bringing Vietnam closer to the target of upper middle income.

Vietnam's GDP per capita currently ranks 6th in Southeast Asia, after Singapore, Brunei, Malaysia, Thailand and Indonesia. It is expected that Vietnam will rank 124th in the world in terms of per capita income, marking a step forward in improving people's lives.

UOB Bank raises Vietnam's GDP growth forecast this year to 7% (Photo: Tuan Huy).

By 2029, this figure is expected to continue to increase to 6,463 USD and reach 12,727 USD in 2039, ranking 100th. At that time, Vietnam's GDP is forecast to increase to 676 billion USD, ranking 32nd, while Singapore is 656 billion USD, ranking 33rd.

However, Singapore's GDP per capita by 2029 is still forecast to rank fourth in the world, at around $106,572.

CEBR believes that Vietnam’s economy will continue to benefit from the diversification of supply chains by many large global companies. In fact, this year, a series of foreign giants have come to Vietnam to seek investment and business opportunities.

Billionaire Jensen Huang's Nvidia Corporation has also signed a strategic cooperation agreement with the Vietnamese Government on the establishment of Nvidia's Vietnam AI R&D Center (VRDC) and AI Data Center. In addition, billionaire Elon Musk's SpaceX also said it intends to invest 1.5 billion USD in Vietnam, while the Trump Organization has decided to invest in Hung Yen.

However, CEBR experts are concerned that export-led economic growth and a high credit/GDP ratio could leave Vietnam's economy vulnerable to global shocks.

Maintaining growth momentum thanks to internal factors

This year, the National Assembly sets a growth target of 6.5-7%, while the Government expects at least 8% or 10% under favorable conditions, creating momentum for double-digit growth in the next phase, to become a high-income country by 2045.

At the regular press conference of the Government on January 8, Deputy Minister of Planning and Investment Nguyen Duc Tam said that there is a basis for the economy to grow by 8% this year. In particular, the GRDP growth requirement is set very high for leading localities such as Hanoi, Ho Chi Minh City, Binh Duong, Dong Nai... at a minimum of 8-10%. "If these localities grow higher than the level achieved in 2024, it will be a huge driving force for the country's growth," said Mr. Tam.

Talking about the growth base for this year and the following years, Mr. Tam said that despite many difficulties, Vietnam has inherited the growth momentum and economic recovery, continuing the high growth momentum of 2024. In particular, the completion of the institutional system, the streamlined apparatus, and the improvement of efficiency and effectiveness are the driving forces that will help economic growth achieve many high results.

The second basis, according to the leader of the Ministry of Planning and Investment, is to promote growth associated with macroeconomic stability, control inflation, and ensure major balances of the economy.

According to the Deputy Minister, in 2024, although we have exempted, reduced, and postponed taxes of about 197,000 billion VND, revenue still increased at the end of the year, about 337,000 billion VND.

“This shows that if we create favorable conditions for businesses, we will earn more, businesses will return to operations and have more confidence in the economy,” said Deputy Minister Nguyen Duc Tam. He also added that since the beginning of this year, the Government has issued tax exemptions, reductions, and deferrals for businesses and people until the end of June.

Vietnam enjoys the growth momentum and economic recovery, continuing the high growth momentum of 2024 (Photo: Huu Nghi).

Ms. Nguyen Thu Oanh, Director of the Price Statistics Department, General Statistics Office, commented that 2025 is an important year in successfully implementing Resolution 13 of the Party. Accordingly, Vietnam prioritizes growth associated with consolidating and stabilizing the macro economy, controlling inflation, and ensuring major balances. The consumer price index target will be controlled at 4.5%.

She said that the low inflation rate is consistent with Vietnam's socio-economic situation. Well-controlled inflation helps promote economic growth and stabilize the macro economy. "This is a bright spot for Vietnam's economic development in 2024," Ms. Oanh commented.

To achieve success in controlling inflation as mentioned above, the Government has directed ministries, branches and localities to drastically implement many solutions.

Accordingly, the Government focuses on strengthening price management and control. Especially during natural disasters and floods, the Government promptly issues national reserve goods, supports and provides relief to people, and ensures the supply and distribution of essential goods and commodities. The price management by the State in the recent past has been consistent with the market and has been managed carefully.

The Government continues to implement policies on tax, fee, and charge support, and support for people and businesses. The State Bank operates a flexible and proactive monetary policy, contributing to controlling inflation. In addition, in 2024, the cooling of global inflation will also help reduce the pressure of "importing inflation" in Vietnam.

Mr. Michael Kokalari, Director of Macroeconomic Analysis and Market Research at VinaCapital, assessed that Vietnam's exports to the US have increased by more than 20% this year (compared to a decrease of about 10% in 2023), which is the main factor supporting Vietnam's GDP growth in 2024.

This growth was largely driven by 40% of exports of electronics and high-tech products. However, export growth to the US will slow next year, partly due to the possibility of a “soft landing” and economic downturn in the US economy.

Therefore, Vietnam's economic growth is expected to shift more to internal factors. Citing data from consumer research companies, Mr. Michael Kokalari said that weak consumer sentiment has affected Vietnam's economic growth in 2023 and 2024, although there has been some improvement in 2024.

Dantri.com.vn

Source: https://dantri.com.vn/kinh-doanh/kinh-te-viet-nam-tang-truong-cao-nam-2024-mo-duong-nam-2025-nhieu-tich-cuc-20250109201757930.htm