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Economic and political overview

Economic 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) 433.70468.49506.43545.10585.99
GDP (Constant Prices, Annual % Change) 5.06.16.16.05.9
GDP per Capita (USD) 4,3244,6494,9865,3265,685
General Government Gross Debt (in % of GDP) 34.433.833.232.632.0
Inflation Rate (%) 3.34.13.53.43.4
Unemployment Rate (% of the Labour Force) 2.02.12.02.02.0
Current Account (billions USD) 25.0914.0313.7512.6910.79
Current Account (in % of GDP) 5.83.02.72.31.8

Source: IMF – World Economic Outlook Database , October 2021

Country Risk

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Main Sectors of Industry

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.

 
Monetary Indicators 20152016201820192020
Vietnamese Dong (VND) - Average Annual Exchange Rate For 1 USD 21,697.5721,935.0022,602.0523,050.2023,208.37

Source: World Bank - Latest available data.

 

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Foreign Trade

Vietnam is one of the most open economies to international trade in Asia, with trade representing 166% of its GDP (World Bank, latest data available). In 2023, computers, electronic products, and components were the main export (17% of the total), followed by telephones and components (14.8%), textiles (9.3%), footwear (5.4%), and machinery, equipment, tools, and spare parts (5.1%); whereas imports were led by computers, electronic products, and components (26.7%), machinery, equipment, tools, and spare parts (13.3%), fabrics (4.0%), iron and steel (3.3%), and telephones and components (2.5% - data Ministry of Commerce).

The main export partners in 2023 were the United States (27.3% of all exports), China (17.1%), South Korea (6.6%), and Japan (6.6%), with ASEAN countries cumulatively accounting for 49.7%. On the other hand, Vietnam's main suppliers were China (33.9%), Japan (16.1%), South Korea (6.6%), and Taiwan (5.6% - data Vietnamese Customs). The Vietnamese economic model remains heavily dependent on foreign investment and exports, especially to the United States and China. In recent years, Vietnam has demonstrated a strong commitment to trade liberalization. It joined the WTO in 2007 and signed Free Trade Agreements (FTAs) with the ASEAN countries and the United States. Vietnam also enjoys a cooperation agreement with the EU. A free trade agreement between both parties was ratified by the European Parliament in February 2020 and is expected to enter into force soon. A Regional Comprehensive Economic Partnership (RCEP) - the world’s largest trade agreement - was signed by Vietnam in 2020, which includes 16 countries in total: Australia, Brunei, Cambodia, China, India, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, Philippines, Singapore, South Korea, and Thailand.

Vietnamese trade is characterized by some geographic inequality: the country shows a trade surplus with Western countries, but a series of deficits with some of its Asian neighbours. In 2023, the value of exports of goods stood at USD 353.78 billion (-9.5% y-o-y), with imports – at USD 325.7 billion - decreasing at a similar pace (-9.3%). As per services, exports reached USD 19.6 billion against USD 29 billion in imports. The World Bank estimated the trade balance to be positive by 8% of GDP (from 3.8% one year earlier). According to the Ministry of Industry and Trade, exports in 2024 increased by 14.3% year-on-year to reach USD 405.53 billion, driven by shipments of electronics, smartphones, clothing, and agricultural products. Imports rose by 16.7% to USD 380.76 billion, resulting in a trade surplus of USD 24.77 billion.

 
Foreign Trade Values 20192020202120222023
Imports of Goods (million USD) 253,393262,701332,455359,148325,776
Exports of Goods (million USD) 264,268282,629335,978371,288353,782
Imports of Services (million USD) 19,02818,32519,40727,44129,060
Exports of Services (million USD) 16,6526,3463,64313,52019,590

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20192020202120222023
Foreign Trade (in % of GDP) 164.7163.2186.7183.8166.3
Trade Balance (million USD) 21,49430,70817,46629,39844,444
Trade Balance (Including Service) (million USD) 19,14320,4211,79915,49535,241
Imports of Goods and Services (Annual % Change) 4.93.316.71.2-3.1
Exports of Goods and Services (Annual % Change) 6.24.114.84.0-1.3
Imports of Goods and Services (in % of GDP) 79.578.992.890.079.1
Exports of Goods and Services (in % of GDP) 85.284.493.993.887.2

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20242025 (e)2026 (e)2027 (e)2028 (e)
Volume of exports of goods and services (Annual % change) 5.45.06.66.56.5
Volume of imports of goods and services (Annual % change) 8.66.37.77.47.1

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

 
International Economic Cooperation
Asia - Pacific Economic Cooperation - APEC

Association of Southeast Asian Nations - ASEAN

 

Main Partner Countries

Main Customers
(% of Exports)		 2022
United States 29.5%
China 15.6%
South Korea 6.5%
Japan 6.5%
Hong Kong SAR, China 2.9%
See More Countries 38.9%
Main Suppliers
(% of Imports)		 2022
China 32.8%
South Korea 17.3%
Japan 6.5%
United States 4.0%
Thailand 3.9%
See More Countries 35.5%

Source: Comtrade, Latest Available Data

 

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Political Outline

Current Political Leaders
President: Luong CUONG (since 21 Oct 2024)
Prime Minister: Pham Minh CHINH (since 26 July 2021)
Next Election Dates
Presidential: 2029
National Assembly: May 2026
Main Political Parties
Since Vietnam is a one-party state, only The Communist Party of Vietnam (CPV) is legally allowed to hold official power.
While independent candidates can run for seats in the National Assembly, they must be vetted and approved through a strict nomination process, which is heavily influenced by the CPV.
Executive Power
The President of Vietnam is the incumbent head of state and the nominal commander in chief of the military of Vietnam, chairing the Council on National Defence and Security. The president is considered to hold the second most powerful position in the Vietnamese political system after the General Secretary of the Communist Party. The President and General Secretary positions can be held by the same person at the same time.
The Prime Minister of Vietnam is the head of government, presiding over a council of ministers composed of a deputy Prime Minister and Ministers and Heads of ministerial-level agencies. The President is elected by the parliament from among its members for a five-year term. The Prime Minister is appointed by the President from among the members of the parliament as head of the government. The government is appointed by the President on the recommendation of the Prime Minister and ratification of the parliament.
Legislative Power
The National Assembly of Vietnam is the country’s unicameral legislature, currently composed of 478 members. Deputies are elected by popular vote to serve five-year terms, with the majority being members of the Communist Party, though a small number are non-partisan. According to the Constitution, the National Assembly is the highest representative body of the people and the supreme organ of state power, holding exclusive legislative authority. It oversees all state activities and plays a key role in government formation, as the Prime Minister, appointed by the President, proposes ministers and heads of ministerial-level agencies, who are then approved by the National Assembly.
 

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