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Economic Overview

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

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 urbanisation. Exports constitute an increasingly significant contribution to Vietnam's GDP and certain sectors, such as industrial production, textile, electronics and seafood production have been growing rapidly. Growth reached a 10-year high of 7.2% in 2019 and due to the outbreak of the COVID-19, dropped but remained in positive territory in 2020 with 2.9% and 2021 with 3.8%. According to the updated IMF forecasts from October l 2021, GDP growth in Vietnam is expected to reach 6.6% in 2022 and 6.8% in 2023, subject to the post-pandemic global economic recovery.

According to the IMF, government debt reached 46.3% of GDP in 2020, up from 43.6% a year earlier, and 47.9% in 2021. It is expected to stabilise at 47.8% in both 2022 and 2023. This limited increase is a result of tightening monetary policies and limits on new government guarantees. Inflation went up to 3.2% in 2020 from 2.2% in 2019, and 2.7% in 2021. It is forecast to average 2.3% in 2022 and 3.2% in 2023 by the latest World Economic Outlook of the IMF (October 2021). Diversified trade structure, rising wages and domestic consumption are the backbone of the Vietnamese economic growth. Nonetheless, labour costs remain competitive, which help attract foreign investments to the country. Economic challenges include lack of infrastructure, business climate shortcomings, pending public sector reforms, growing inequality, a weak banking system. Tax reforms and privatisation of state-owned companies helped compensate the budget deficit in 2021 which stayed below 4% of GDP (Financial Post, 2022). Around 40% of Vietnam's debt has medium or long-term maturity, a significant risk considering 40% of said debt is denominated in foreign currencies and represent a currency risk. Nonetheless, public authorities continue to intervene in both directions to keep the Dong within a narrow band against major international currencies and accrue foreign reserves.

The unemployment rate in Vietnam remains particularly low. It reached 3.3% in 2020 from 2.2% in 2019 and 2.7% in 2021. It is expected to reach 2.4% in 2022 and 2.3% in 2023 (IMF, October 2021). Social challenges include poverty reduction, improving higher education, and allowing freedom of the press. Transparency International ranks Vietnam as 87th out of 180 countries in its Corruption Perceptions Index 2021, from the 104th spot a year earlier.

 
Main Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 327.87e343.11e368.00415.49461.02
GDP (Constant Prices, Annual % Change) 7.2e2.93.86.66.8
GDP per Capita (USD) 3,3983,5233,7434,1874,605
General Government Gross Debt (in % of GDP) 43.6e46.347.947.847.8
Inflation Rate (%) 2.83.2e2.02.33.2
Unemployment Rate (% of the Labour Force) 2.23.3e2.72.42.3
Current Account (billions USD) 12.4812.536.6913.2612.22
Current Account (in % of GDP) 3.83.7e1.83.22.7

Source: IMF – World Economic Outlook Database , October 2021

Note: (e) Estimated Data

Country Risk

See the country risk analysis provided by La Coface.

 

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Main Sectors of Industry

Vietnam's economy is based on large state-owned industries such as textiles, food, furniture, plastics and paper as well as tourism and telecommunications. Agriculture represented 14.8% of GDP and employs 38% of the total workforce in 2021 (World Bank, 2022). Main crops include rice, coffee, cashew nuts, corn, pepper, sweet potatoes, peanuts, cotton, rubber and tea as well as aquaculture. While agricultural trade surplus edged up on the year in 2019, the livestock industry continued to suffer from various diseases, including swine flu.

Industry contributed 33.7% of GDP and employed 27% of the total workforce in 2021 (World Bank). The energy sector has boomed in recent years (coal, hydrocarbons, electricity, cement, steel industry). Despite being a 'newcomer' in the oil industry, Vietnam has become the third largest Southeast Asian producer. The country has also invested in high value-added industries such as cars, electronic and computer technologies (software).

Services represented 41.6% of GDP and employed 35% of the total workforce in 2021 (World Bank). Main services include tourism and telecommunications.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 37.2 27.4 35.3
Value Added (in % of GDP) 14.9 33.7 41.6
Value Added (Annual % Change) 2.7 4.0 2.3

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. Vietnamese trade represented 208% of GDP in 2020, down 3% from the previous year (World Bank, 2022). Vietnam exports transmission and electronic apparatus (22% of all exports in 2020), electronic integrated circuits and microassemblies, footwear, technology products and automatic data processing machines. Imports include electronic integrated circuits and microassemblies (15% of all imports in 2020), electronic apparatus and semiconductors (Comtrade, 2021).

The main trading partners are the U.S. (27.4% of all exports in 2020), China, Japan and South Korea. Its main providers are China (32.2% of all imports), South Korea, Japan and the United States. 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 strong commitment to trade liberalisation. 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, Thailand.

The value of exports of goods was estimated at 282.7 billion USD in 2020, up from 264.2 billion USD in 2019. The imports of goods amounted to 262.7 billion USD in 2020, up from 253.3 billion USD in 2019. The trade surplus reached 21.5 billion USD in 2019, against 16.5 billion in the previous year. Vietnam reported a 19% growth in exports in 2021, as it saw its trade surplus with the United States, its largest export market, widening to an all time high (81 billion USD from 63 billion USD in the previous year). Vietnam's total exports in 2021 came in at 336.31 billion USD, while its imports rose 26.5% to 332.23 billion USD, resulting in a trade surplus of 4.08 billion USD Vietnam Customs Department, 2022). Furthermore, since 2018, Vietnam is a net exporter of services. Vietnamese trade is characterised by some geographic inequality: the country shows a trade surplus with Western countries, but a series of deficits with some of its Asian neighbours. To achieve further progress, the country must continue to increase the value of exports and achieve product diversification. 

 
Foreign Trade Values 20162017201820192020
Imports of Goods (million USD) 174,231211,518236,862253,393262,753
Exports of Goods (million USD) 176,785214,323243,699264,268282,725
Imports of Services (million USD) 10,82216,82417,80218,55216,914
Exports of Services (million USD) 12,38512,94824,47727,42118,677

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

Foreign Trade Indicators 20162017201820192020
Foreign Trade (in % of GDP) 184.7200.4208.3210.4209.3
Trade Balance (million USD) 11,04210,84616,54021,494n/a
Trade Balance (Including Service) (million USD) 6,7846,81612,86019,143n/a
Imports of Goods and Services (Annual % Change) 15.317.512.88.33.3
Exports of Goods and Services (Annual % Change) 13.916.714.36.75.0
Imports of Goods and Services (in % of GDP) 91.198.8102.5103.6103.2
Exports of Goods and Services (in % of GDP) 93.6101.6105.8106.8106.1

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20212022 (e)2023 (e)2024 (e)2025 (e)
Volume of exports of goods and services (Annual % change) 0.711.17.87.67.9
Volume of imports of goods and services (Annual % change) -4.810.19.49.49.6

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)
2020
United States 27.4%
China 17.4%
Japan 6.8%
South Korea 6.8%
Hong Kong SAR, China 3.7%
See More Countries 37.9%
Main Suppliers
(% of Imports)
2020
China 32.2%
South Korea 17.9%
Japan 7.8%
United States 5.3%
Thailand 4.2%
See More Countries 32.6%

Source: Comtrade, Latest Available Data

 

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Political Outline

Current Political Leaders
President: Nguyen Xuan PHUC (since 5 April 2021)
Prime Minister: Pham Minh CHINH (since 5 April 2021)
Next Election Dates
Presidential: 2023 (exact date to be confirmed)
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.
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 Ministers 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 unicameral legislature of the state, composed of 499 members. All members of the council of ministers are derived from the National Assembly. Parliament members are elected by popular vote to serve five-year terms; however, almost all are members of the Communist Party. According to the country's constitution, the National Assembly is the highest representative body of the people and the only organisation with legislative powers. It has a broad mandate to oversee all government functions.
 

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COVID-19 Country Response

COVID-19 epidemic evolution
To find out about the latest status of the COVID19 pandemic evolution and the most up-to-date statistics on the COVID19 disease in Vietnam, please visit the Vietnamese government platform with the official data. Official information on the progress of the epidemic in Vietnam is consolidated by the Ministry of Health. The agency provides a daily epidemiological update, which includes key national figures.

For the international outlook you can consult the latest situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.

Sanitary measures
To find out about the latest public health situation in Vietnamese and the current sanitary measures in vigour, please consult the Vietnamese government platform on COVID-19 including the up-to-date information on the containment measures put in place and public health recommendations.
Travel restrictions
The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.

The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.
Import & export restrictions
For the information on all the measures applicable to movement of goods during the period of sanitary emergency due to the COVID-19 outbreak (including eventual restrictions on imports and exports, if applicable), please consult the portals of the Vietnamese Ministry of Industry and Trade and the General Department of Customs.

For a general overview of trade restrictions due to COVID-19 pandemic, please consult the section dedicated to Vietnam on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.

Economic recovery plan
For the information on the economic recovery scheme put in place by the Vietnamese government to address the impact of the COVID19 pandemic on the Vietnamese economy, please visit the website of the Vietnamese Ministry of Economy and Trade website. The information on the French economic emergency plan is available here.

For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and  macroeconomic) taken by the French government to limit the socio-economic impact of the COVID-19 pandemic,  please consult the section dedicated to France in the IMF’s Policy Tracker platform.

Support plan for businesses
For the information on the local business support scheme established by the Vietnamese government to help small and  medium-sized companies to deal with the economic impacts of the COVID19 epidemic on their activity, please consult  the Resolution No. 42/NQ-CP issued by the Vietnamese Government in April (in Vietnamese).

For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the World Bank's Map of SME-Support Measures in Response to COVID-19.

Support plan for exporters
To find out about the support plan for exporters put in place by the Vietnamese government, please consult the Vietnamese Ministry of Finance and the Ministry of Industry and Trade websites.
 

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