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Vietnam
The Vietnam economy is one of the fastest–growing economies in the world. The development was largely driven by a strategic shift from agriculture to manufacturing and services. This transition has been bolstered by substantial private investment, a robust tourism sector, rising wages, and accelerated urbanization. Industries such as textiles, electronics, and seafood production have expanded rapidly, significantly enhancing export performance.
In 2018, Vietnam’s GDP grew by 7.1%, followed by 7.02% in 2019. Despite the global economic downturn caused by the Covid-19 pandemic in 2020, Vietnam achieved a positive GDP growth rate of 2.91%, thanks to effective public health measures that mitigated the pandemic’s economic impact. The economy continued to grow in 2021, with a GDP increase of 2.58%, and surged by 8.02% in 2022—the highest growth rate since 1997.
In 2023, Vietnam’s GDP growth moderated to 5%, reflecting challenges such as a slowdown in external demand and domestic financial sector strains. For 2024 and 2025, the International Monetary Fund (IMF) projects a recovery with an anticipated GDP growth rate of 6.1%.
Vietnam GDP Annual Growth Rate (in %)
According to the IMF, Vietnam’s population is approximately 100 million.
The unemployment rate was 1.60% in 2023 and stood at 2.27% in the first half of 2024.
Vietnam Unemployment Rate (in %)
Currency and Central Bank
The Vietnamese dong (VND) has been the official currency of Vietnam since 1978. Historically, it was subdivided into 10 hao; however, hao coins have not been in circulation since 2014, and their acceptance in retail transactions has ceased.
The State Bank of Vietnam (SBV), the nation’s central bank, holds approximately 65% of VietinBank, one of Vietnam’s largest listed banks by capital. The SBV is tasked with promoting monetary stability, formulating monetary policies, and supervising financial institutions.
Vietnam’s inflation rate has experienced fluctuations in recent years. After recording an inflation rate of 1.84% in 2021, the rate increased to 3.15% in 2022. The IMF projects Vietnam’s inflation to average 4.1% in 2024.
Vietnam economy: Inflation (in %)
Industry and Trade
Vietnam’s economy is anchored by three primary sectors: agriculture, industry (including construction), and services. The services sector has emerged as the largest contributor, accounting for 44.63% of the country’s GDP in 2023, according to data from the government.
The industrial sector, which includes manufacturing and construction, contributed 32.72% to Vietnam’s GDP in 2023. Manufacturing is the second-largest employer in the country. Key industries such as coal, hydrocarbons, electricity, cement, and steel have experienced substantial growth. Notably, Vietnam is the third-largest oil producer in Southeast Asia. High–value-added industries, including automobiles, electronics, and computer technologies, continue to attract significant foreign investments.
The agricultural sector accounted for 11.99% of GDP in 2023. Employing nearly 14 million individuals, it stands as the largest employer among all industries. Vietnam is a leading global exporter of agricultural products such as rice, coffee, cashew nuts, corn, pepper, sweet potatoes, peanuts, cotton, rubber, and tea.
In terms of trade, the Vietnam economy ranked 21st globally in total exports in 2023. The country’s main export products include phones and accessories, computers and electronic products, machinery and equipment, textiles and garments, and footwear. The United States was Vietnam’s largest export market, with a turnover of $96.8 bn in 2023. Other significant export partners include China, Japan, South Korea, and the Netherlands.
When it comes to imports, Vietnam ranked 19th globally in 2023. The top import products were electronic products and components, telephones, refined petroleum, fabrics of all kinds, and iron and steel. China remained the largest import market for Vietnam, with a turnover of $111.6 bn in 2023. Other key import partners include South Korea, Japan, the United States, and the Netherlands.
Vietnam economy: Balance of Trade
Stock Exchanges and Capital Markets
The Ho Chi Minh City Stock Exchange (HoSE or HSX) and the Hanoi Stock Exchange (HNX) are the two major stock exchanges in Vietnam. The Vietnam Stock Index or VN-Index serves as the benchmark of HoSE and is based on the total capitalisation of all listed companies in the exchange.
In 2021, the Vietnamese government established the Vietnam Stock Exchange (VNX) as a holding entity to oversee both HoSE and HNX, aiming to enhance market efficiency and transparency. Under this structure, HNX is designated to operate the derivatives and bond markets, while HoSE is responsible for equity trading.
According to the Ministry of Finance, HNX will cease accepting new stock listing applications from July 1, 2025. All existing listed companies on HNX are required to transition their listings to HoSE by December 31, 2025.
Bond Market
Vietnam’s bond market has experienced significant growth, driven by government initiatives aimed at diversifying and expanding the market. While government bonds continue to dominate, the availability of municipal, corporate, and convertible bonds has increased, contributing to a more dynamic financial environment.
In the third quarter of 2023, Vietnam’s local currency bond market expanded by 3.9% quarter-on-quarter, reaching a total of VND 2,000 tn. This growth was primarily propelled by the State Bank of Vietnam’s resumption of central bank securities issuance to manage liquidity in the banking system, according to the Asian Development Bank (ADB.) However, the growth of outstanding Treasury and other government bonds was modest at 1.5% quarter-on-quarter, due to a decline in new issuances. Concurrently, the local currency corporate bond segment contracted by 3.1% quarter-on-quarter, influenced by a substantial volume of maturities during the period.
Reflecting the Vietnam economy’s favorable medium-term growth outlook and robust foreign direct investment inflows, Fitch Ratings upgraded Vietnam’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘BB+’ from ‘BB’ in December 2023. This upgrade underscores the sustained improvements in Vietnam’s structural credit metrics and the increasing confidence in its economic resilience.
Real Estate Market
Vietnam’s real estate sector, once thriving, faced setbacks amid the challenges imposed by the Covid-19 pandemic and is still struggling. In the first five months of 2023, over 550 real estate companies dissolved, reflecting the market’s difficulties.
However, signs of recovery became evident in the latter half of 2023, driven by growing investor confidence and improved market fundamentals. The Savills Q3/2023 Market Brief highlighted a rebound in the commercial real estate segment. For instance, Vietnam’s office market exhibited higher occupancy rates and relatively competitive rental costs compared to other regional hubs.
Despite headwinds in the residential sector, apartment prices in major cities such as Hanoi and Ho Chi Minh City have risen significantly, marking a 77% increase over the past four years, according to Savills Vietnam.
In H1/2024, the real estate market continued to stabilize. Primary residential supply in Hanoi increased by 9% quarter-on-quarter to nearly 12,928 units, with a 74% surge in sales, signaling robust demand. In Ho Chi Minh City, however, the primary apartment stock fell by 35% quarter-on-quarter, reflecting tighter supply conditions.
The Savills Q3/2024 Market Brief for Vietnam highlighted the growing role of foreign direct investment (FDI) in the real estate sector. Real estate accounted for 18% of FDI in the first nine months of 2024, underscoring strong investor interest. Infrastructure developments and evolving government policies have also provided momentum, creating opportunities for long-term growth.
Vietnam opened its property market to foreigners in 2015, allowing those with a tourist visa to purchase property. However, foreign ownership is limited to a maximum of 30% of condominium units and no more than 10% of properties within a landed project.
Editorial Note:
This article was written with the assistance of AI. A human editor reviewed and refined the text for accuracy and quality before publication.
Source of charts: tradingeconomics.com
