The miracle growth story of Vietnam has further to unfold

Vietnam has long been hailed as a development success story. Thanks to its successful economic reform, Vietnam’s GDP grew by an average rate of 7% annually in the past three decades, surpassing all its ASEAN regional peers. Although 2023 and 2024 are set to see Vietnam’s weakest growth outside of Covid years due to domestic and external headwinds, we think the pain is short-term.

What you will learn:

• We believe Vietnam’s global share of goods exports will increase further, spurred by multinationals’ China Plus One strategies, driving GDP outperformance relative to the country’s ASEAN peers until at least 2030.
• Vietnam has emerged as a key winner amid the global supply chain reshuffling of recent years. Not only has it quickly increased its share of US electronics imports since 2018 – surpassing most of US’ key import partners – but data this year also suggest that Chinese firms are investing more in production bases in Vietnam.
• To the extent that US-China trade tension persists, there are reasons to believe that this rivalry will continue strengthening the trade uptrend and FDI inflows. Vietnam has one of the most attractive business environments among similar-income economies regionally, with competitive labour costs and relatively flexible labour regulations that should ensure its attractiveness.