Vietnam’s economy has surpassed its 2024 growth targets, with GDP exceeding expectations and per capita income increasing significantly. Experts predict the country will soon achieve upper-middle-income status and overtake Singapore’s GDP earlier than forecasted.

Economic growth exceeds projections

According to the General Statistics Office (GSO), Vietnam’s GDP grew by 7.09% in 2024, exceeding the National Assembly’s target of 6-6.5%. This brings the nation’s nominal GDP to over 11.5 quadrillion VND ($476.3 billion), surpassing the $450 billion estimate by the UK-based Center for Economics and Business Research (CEBR).

The CEBR had projected Vietnam’s GDP to reach $450 billion in 2024, ranking 34th globally, and surpass Singapore’s GDP by 2029. However, with actual figures exceeding forecasts by $26 billion and growth expected to reach 8% or even double digits in 2025, Vietnam may outpace Singapore much sooner.

The CEBR predicts Vietnam’s average annual GDP growth to be 5.8% over the next five years - a figure lower than the Vietnamese government’s projections. GSO representatives highlight that the strong 2024 growth lays a solid foundation for accelerated expansion in 2025.

Per capita income increases

Vietnam’s GDP per capita in 2024 is estimated at 114 million VND ($4,700), an increase of $377 from 2023.

According to the World Bank’s classification for 2023-2024, a country is considered upper-middle income if its Gross National Income (GNI) per capita is between $4,516 and $14,005.

Vietnam’s GNI per capita in 2023 was $4,180, up from $4,020 in 2022 and $3,590 in 2021. Assuming a 7% growth rate in 2024, GNI per capita could rise by $292 to $4,472, falling just short of the upper-middle-income threshold.

However, with sustained economic growth, Vietnam is expected to achieve upper-middle-income status by 2025.

Regional comparison and future outlook

Vietnam’s GDP per capita by purchasing power parity (PPP) in 2024 is estimated at $16,193, according to CEBR, classifying the country as lower-middle income.

Within Southeast Asia, Vietnam ranks sixth in GDP per capita, trailing Singapore, Brunei, Malaysia, Thailand, and Indonesia. The ranking is expected to remain unchanged in 2024.

However, the International Monetary Fund (IMF) projects that by 2026, Vietnam will climb to fourth place among ASEAN-6 nations, with GDP per capita reaching $6,140. This would place Vietnam ahead of Indonesia ($6,125) and the Philippines ($4,801).

Driving forces for growth

Vietnam’s economic momentum is fueled by a growing wave of investment in the technology sector, which is expected to drive rapid GDP growth and income increases in the coming years.

As the country continues to attract foreign direct investment and develop its infrastructure, experts anticipate Vietnam will soon join the ranks of upper-middle-income nations, solidifying its position as a key player in the global economy.

Manh Ha