Economic and Political Overview

flag Vietnam Vietnam: Economic and Political Overview

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline | COVID-19 Country Response

 

Economic Indicators

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 neighboring China. This accelerated economic pace is due to labor 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. In 2022, Vietnam underwent a resilient economic resurgence following the pandemic (+8%); however, GDP expanded by 5.05% in 2023, falling short of the government's official growth target of 6.5%, primarily due to a slowdown in overseas demand affecting the Southeast Asian export hub (official government data). According to IMF forecasts, GDP growth in Vietnam is expected to pick up to 5.8% this year and 6.9% in 2025.

The government's financial strategy for 2030 incorporates initiatives aimed at expanding the value-added tax base, strengthening the capabilities of tax authorities, streamlining import tariffs, and offering electronic and digital services to taxpayers. The strategy aims for a budget deficit of approximately 3.7% of GDP from 2021 to 2025, with a further decrease to 3% of GDP by 2030. However, Fitch Ratings forecasts the budget deficit to average around 4.3% of GDP between 2024 and 2025, rising from an estimated 4.1% of GDP in 2023. According to the IMF, government debt decreased to an estimated 34% of GDP in 2023, from 35.3% one year earlier, and is expected to further decrease over the forecast horizon (31.7% by 2025). 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). The General Statistics Office reported that Vietnam's consumer price index for 2023 increased by 3.25% year-on-year, aligning with the target established by the National Assembly. Throughout the year, the prices of housing and construction materials increased by 6.58%; food rose by 6.85%; electricity by 4.86%; drugs and medical services experienced a 1.23% increase; and other goods and services saw a 4.65% uptick. Inflation is expected to return around 2% this year (IMF).

The unemployment rate in Vietnam remains particularly low. It fell to 2.28% in 2023 according to the General Statistics Office. The unemployment rate among young individuals aged 15 to 24 stood at 7.63%, equivalent to 437,300 people, marking a decrease of 0.15 percentage points compared to 2022. Over the last decade, poverty declined impressively, dropping from 16.8% to 5%, although around 13.5 million people are still economically vulnerable (World Bank).

 
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 , Latest available data

Note: (e) Estimated Data

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 11.9% of GDP and employing 34% of the total workforce. Major crops include rice, coffee, cashew nuts, corn, pepper, sweet potatoes, peanuts, cotton, rubber, tea, and aquaculture. In 2023, Vietnam's agriculture sector posted GDP growth of 3.83% and a trade surplus of over USD 11 billion.

Industry contributes significantly to GDP, representing 38.35% and employing 31% 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 one-fourth of GDP, with industrial production rising by 1.5% in 2023.

Services play a crucial role in Vietnam's economy, representing 41.3% of GDP and employing 36% of the total workforce. Key sectors include tourism, banking and finance, telecommunications, and retail. Despite challenges from the pandemic, tourism remains significant, with 12.6 million international tourists welcomed in 2023, although this figure was below the pre-pandemic level of 2019. Revenue from lodging and catering services reached around USD 27.77 billion in 2023. The banking sector recorded deposits of more than USD 562.5 trillion, and total goods retail sales and consumer service revenues increased by 9.6% year-on-year to approximately USD 256.7 billion in 2023.

 
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.

 

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Monetary Indicators 20152016201820192020
Vietnamese Dong (VND) - Average Annual Exchange Rate For 1 MUR 618.93617.16666.05649.30589.84

Source: World Bank - Latest available data.

 
 

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Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
61,7/100
World Rank:
90
Regional Rank:
17

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 

Business environment ranking

Definition:

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:
6.25/10
World Rank:
46/82

Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024

 

Country Risk

See the country risk analysis provided by Coface.

 

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Foreign Trade in Figures

Vietnam is one of the most open economies to international trade in Asia, with trade representing 186% of its GDP (World Bank, latest data available). Vietnam exports transmission electronic apparatus and telephones (21.2% of all exports in 2022), electronic integrated circuits and microassemblies (3.6%), footwear (3.2%), technology products, and automatic data processing machines. Imports include electronic integrated circuits and microassemblies (15.3% of all imports in 2022), telephones (7%), petroleum oils (4.7%), and coal (1.8% - data Comtrade).

The main export partners are the United States (29.5% of all exports in 2022), China (15.6%), South Korea (6.5%), Japan (6.5%), and Hong Kong (2.9%). Its main suppliers are China (32.82% of all imports), South Korea (17.3%), Japan (6.5%), and the United States (4%). 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 neighbors. In 2022, the value of exports of goods surged to USD 371.29 billion, up from USD 335.98 billion in 2021. Similarly, imports of goods rose to USD 359.15 billion in 2022, compared to USD 332.45 billion in 2021 (data WTO). According to the Ministry of Industry and Trade, the total import-export turnover in 2023 is estimated to reach USD 683 billion, comprising USD 354.5 billion from exports and USD 328.5 billion from imports.

 
Foreign Trade Indicators 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
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
Trade Balance (million USD) 16,54021,49430,70817,46625,717
Trade Balance (Including Service) (million USD) 12,86019,14320,4211,79913,093
Foreign Trade (in % of GDP) 164.7164.7163.2186.5n/a

Source: WTO – World Trade Organisation ; World Bank , Latest Available Data

 

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

 
 

Main Products

370.9 bn USD of products exported in 2022
Telephone sets, incl. telephones for cellular...Telephone sets, incl. telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, incl. apparatus for communication in a wired or wireless network [such as a local or wide area network]; parts thereof (excl. than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528) 21.2%
Electronic integrated circuits; parts thereofElectronic integrated circuits; parts thereof 3.6%
Footwear with outer soles of rubber, plastics,...Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials (excl. toy footwear) 3.2%
Parts and accessories (other than covers, carrying...Parts and accessories (other than covers, carrying cases and the like) suitable for use solely or principally with machines of heading 8469 to 8472, n.e.s. 2.7%
Furniture and parts thereof, n.e.s. (excl. seats...Furniture and parts thereof, n.e.s. (excl. seats and medical, surgical, dental or veterinary furniture) 2.2%
See More Products 67.1%
358.8 bn USD of products imported in 2022
Electronic integrated circuits; parts thereofElectronic integrated circuits; parts thereof 15.3%
Telephone sets, incl. telephones for cellular...Telephone sets, incl. telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, incl. apparatus for communication in a wired or wireless network [such as a local or wide area network]; parts thereof (excl. than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528) 7.0%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 2.7%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 2.0%
Coal; briquettes, ovoids and similar solid fuels...Coal; briquettes, ovoids and similar solid fuels manufactured from coal 1.8%
See More Products 71.1%

Source: Comtrade, Latest Available Data

 
 

To go further, check out our service Import Export Flows.

 
 

Main Services

13.5 bn USD of services exported in 2022
41.50%
23.74%
15.73%
9.63%
3.60%
1.71%
1.33%
1.32%
0.75%
0.58%
0.11%
27.4 bn USD of services imported in 2022
45.65%
24.36%
12.59%
6.42%
3.48%
2.08%
1.63%
1.44%
1.07%
0.74%
0.54%

Source: United Nations Statistics Division, Latest Available Data

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Sources of General Economic Information

Ministries
Vietnam Ministry of Trade
Vietnam Ministry of Planning and Investment
Statistical Office
General Statistics Office of Vietnam
Central Bank
State Bank of Vietnam
Stock Exchange
Ho Chi Minh Stock Exchange
Hanoi Stock Exchange
Search Engines
Google Vietnam
Yahoo! Vietnam
Economic Portals
Vietnam Economic Portal

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Political Outline

Current Political Leaders
President: Vo Van Thuong (since 2 March 2023)
Prime Minister: Pham Minh Chinh (since 5 April 2021)
Next Election Dates
Presidential: 2028
National Assembly: 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.
Type of State
Single-party socialist republic.
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 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.
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
175/180
 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Not Free
Political Freedom:
7/7

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

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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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Latest Update: April 2024