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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%, 2021 with 2.6% and then 2022 with 7%. According to the updated IMF forecasts from January 2023, GDP growth in Vietnam is expected to reach 6.2% in 2023 and 6.6% in 2024, subject to the post-pandemic global economic recovery.

According to the IMF, government debt reached 41.7% of GDP in 2020, 39.7% in 2021 and 40.2% in 2022. It is expected to stabilise at 40.5% and 40.8% in 2022 and 2023. This limited increase is a result of tightening monetary policies and limits on new government guarantees. Inflation reached 1.8% in 2021 from 3.2% in 2020, and 3.8% in 2022. It is forecast to average 3.9% in 2023 and 3.5% in 2024 by the latest World Economic Outlook of the IMF (January 2023). 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 2.7% in 2021 from 2.5% in 2020 and 2.4% in 2022. It is expected to reach 2.3% in 2022 and 2023 (IMF, January 2023). Social challenges include poverty reduction, improving higher education, and allowing freedom of the press. Transparency International ranks Vietnam as 77th out of 180 countries in its Corruption Perceptions Index 2022, from the 87th spot a year earlier.

 
Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 406.45433.36469.67514.65559.29
GDP (Constant Prices, Annual % Change) 8.04.75.86.96.8
GDP per Capita (USD) 4,0874,3164,6365,0375,429
General Government Gross Debt (in % of GDP) 35.334.032.731.731.0
Inflation Rate (%) n/a3.43.43.43.4
Unemployment Rate (% of the Labour Force) 2.32.12.12.02.0
Current Account (billions USD) -1.071.023.344.165.95
Current Account (in % of GDP) -0.30.20.70.81.1

Source: IMF – World Economic Outlook Database , October 2021

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 12.6% of GDP and employs 37% of the total workforce in 2022 (World Bank, 2023). Main crops include rice, coffee, cashew nuts, corn, pepper, sweet potatoes, peanuts, cotton, rubber and tea as well as aquaculture. While agricultural trade surplus represented over 11 billion USD in 2022, the livestock industry continued to suffer from various diseases, including swine flu.

Industry contributed 37.5% of GDP and employed 27% of the total workforce in 2022 (World Bank, 2023). 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 41.2% of GDP and employed 35% of the total workforce in 2021 (World Bank, 2023). Main services include tourism and telecommunications.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 29.0 33.1 37.8
Value Added (in % of GDP) 11.9 38.3 41.3
Value Added (Annual % Change) 3.4 7.8 10.0

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 186% of GDP in 2021 (World Bank, 2023). Vietnam exports transmission electronic apparatus and telephones (22% of all exports in 2021), electronic integrated circuits and microassemblies (4.3%), footwear, technology products and automatic data processing machines. Imports include electronic integrated circuits and microassemblies (14.5% of all imports in 2021), electronic apparatus, semiconductors and printed circuits (Comtrade, 2023).

The main trading partners are the United States (28.7% of all exports in 2021), China (16.7%), South Korea (6.5%) and Japan (6%). Its main providers are China (33.2% of all imports), South Korea (17%), Japan (6.8%) and the United States (4.6%). 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 335.92 billion USD in 2021, up from 282.72 billion USD in 2020. The imports of goods amounted to 331.58 billion USD in 2021, up from 262.75 billion USD in 2020. The trade surplus reached 17.7 billion USD in 2021, against 30.7 billion in the previous year. Vietnam reported a 18.8% 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 94.9 billion USD in 2022 (NASDAQ, 2023). Vietnam's total exports in 2021 came in at 402.89 billion USD, while its total imports rose 26.5% to 350.98 billion USD, resulting in a trade surplus including services of 1.963 billion USD (WTO, 2023). 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 20182019202020212022
Imports of Goods (million USD) 236,862253,393262,701332,455359,148
Exports of Goods (million USD) 243,699264,268282,629335,978371,288
Imports of Services (million USD) 18,49919,02818,32519,40725,567
Exports of Services (million USD) 14,78016,6526,2903,67312,905

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

Foreign Trade Indicators 20182019202020212022
Foreign Trade (in % of GDP) 164.7164.7163.2186.5n/a
Trade Balance (million USD) 16,54021,49430,70817,46625,717
Trade Balance (Including Service) (million USD) 12,86019,14320,4211,79913,093
Imports of Goods and Services (Annual % Change) 9.64.93.315.8n/a
Exports of Goods and Services (Annual % Change) 12.36.24.113.9n/a
Imports of Goods and Services (in % of GDP) 80.279.578.993.2n/a
Exports of Goods and Services (in % of GDP) 84.485.284.493.3n/a

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20232024 (e)2025 (e)2026 (e)2027 (e)
Volume of exports of goods and services (Annual % change) -1.55.69.09.99.9
Volume of imports of goods and services (Annual % change) -0.65.910.210.710.7

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: Võ Thị Ánh Xuân (acting) since 18 January 2023
Prime Minister: Pham Minh CHINH (since 5 April 2021)
Next Election Dates
Presidential: 2028 (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

Travel restrictions
Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.
Import & export restrictions
A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
For the general overview of the key economic policy responses to the COVID-19 pandemic (fiscal, monetary and macroeconomic) undertaken by the government of Vietnam please consult the country's dedicated section in the IMF’s Policy Tracker platform.
Support plan for businesses
For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.

 

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