Economic achievements worth celebrating

Vietnam's gross domestic product (GDP) was estimated to have grown 9.95% year-on-year in the third quarter of 2026, bringing growth for the first nine months to 9.01%.

Looking back at the first nine months of the year, there is every reason to take pride in these results and recognize the government's flexible and decisive economic management, along with the sustained efforts of businesses and workers across the country.

Despite an increasingly fragmented global geopolitical landscape and volatile supply chain costs, Vietnam has maintained impressive economic growth, kept inflation under control, preserved macroeconomic stability and maintained social welfare.

Traditional growth drivers, including exports, public investment and domestic consumption, continue to provide a solid foundation. Meanwhile, emerging drivers such as digital transformation, the green economy and a new generation of foreign investment are gradually demonstrating their effectiveness.

Reports by international financial institutions also highlight Vietnam's development achievements.

The country's economy has surpassed $500 billion in size, while GDP per capita has exceeded $5,000. In July 2026, the World Bank moved Vietnam into the upper-middle-income country group.

Economic growth forecasts have also been revised upward. The International Monetary Fund (IMF) projects Vietnam's economy will expand by 7.5% this year, while the Asian Development Bank (ADB) forecasts 7.8% and the World Bank 6.8%.

At a time when the global economy is growing slowly, these forecasts reinforce Vietnam's position as a bright spot.

During the first nine months of 2026, Vietnam's total merchandise trade exceeded $888 billion. With a population of more than 100 million, the country is advancing rapidly on the global economic map.

Yet a different picture emerges when the contribution of domestic businesses is examined separately, particularly in exports and manufacturing.

The strength of Vietnamese enterprises remains relatively modest compared with the impressive national figures that frequently dominate economic discussions.

An economy heavily reliant on exports and foreign investment

For every five dollars Vietnam earns from exports, domestic businesses contribute less than one.

Of the country's $434.30 billion in exports during the first nine months of 2026, foreign direct investment (FDI) enterprises accounted for $349.55 billion, or 80.5%, according to the National Statistics Office (GSO).

Domestic enterprises, including crude oil exporters, contributed $84.75 billion, equivalent to just 19.5%.

In other words, domestic businesses generated less than one-fifth of Vietnam's export value, illustrating how heavily the country's export success depends on foreign-invested companies.

The gap is widening.

Exports by FDI enterprises rose 29.5% year-on-year, while those by domestic businesses increased by only 7.2%.

Three major product categories, electronics, machinery and equipment, and mobile phones, most of which are dominated by foreign-invested enterprises, recorded an additional $66.33 billion in exports. Together, they accounted for 78% of the country's total export growth.

By comparison, seven product groups traditionally associated with Vietnam's domestic production strengths and natural resources, including wood and wood products, seafood, fruit and vegetables, cashew nuts, coffee, rice and rubber, generated combined exports of $45.35 billion.

These familiar products, long regarded as Vietnamese competitive advantages, now represent only a small slice of the country's rapidly expanding export market.

The imbalance is equally apparent in manufacturing.

According to the Organisation for Economic Co-operation and Development's (OECD) 2025 report on the quality of foreign direct investment in Vietnam, foreign-owned businesses account for less than 3% of formally registered enterprises but generate 78% of manufacturing revenue.

The OECD also found that average wages at foreign-owned businesses were about 21% higher than those paid by domestic enterprises.

Vietnam therefore has good reason to continue attracting high-quality foreign investors.

The more important question, however, is how many Vietnamese companies have managed to grow alongside those major foreign-invested factories.

A survey by the Vietnam Chamber of Commerce and Industry (VCCI) found that only 5.6% of private enterprises maintained both upstream and downstream business linkages with the FDI sector. Just 3.7% participated in export networks.

Vietnam's success in attracting foreign investment is clearly reflected in its export performance. Yet relatively few domestic businesses have managed to become part of those international production chains.

Household businesses remain small and fragmented

The non-state sector now accounts for 51% of Vietnam's GDP, according to statistical yearbooks covering 2021-2025.

Compared with the period before the Doi Moi economic reforms, when the economy operated largely under a single state-dominated model, this represents a remarkable development achievement.

However, statistical yearbooks published through 2020 classified the non-state sector into three components: the collective economy, household and individual businesses, and formally registered private enterprises operating under the Enterprise Law.

Under that classification, formally registered private businesses accounted for only 9-10% of GDP.

Household and individual businesses contributed approximately 29-30%, while the collective economy represented just around 4%.

In other words, formally registered private enterprises operating as organized businesses accounted for roughly one-tenth of national GDP, while household businesses contributed approximately three-tenths.

This distinction is important when assessing the actual strength of Vietnam's private economy.

According to GSO figures, the non-state sector comprises more than one million enterprises and over 6.1 million household businesses, contributes 51% of GDP and more than 30% of government budget revenue, and employs approximately 82% of the workforce.

Those 6.1 million household businesses, ranging from small shops and restaurants to family-run workshops, remain a major force in the economy.

Yet many operate on a very small scale, with limited capital and technology, leaving them poorly equipped to connect with or compete against international corporations.

The challenges have become increasingly visible.

A VCCI survey released in mid-2026 found that nearly 82% of household businesses reported declining revenue.

Meanwhile, VCCI's Vietnam Private Sector Economic Report 2025 found that 60.6% of surveyed enterprises were struggling to find customers, a level comparable to the difficulties experienced during the Covid-19 pandemic.

Nearly two-thirds were either losing money or making only marginal profits.

According to GSO, business revenue rose by an average of 21% during the first eight months of 2026, while purchasing and input costs increased by 27%.

With costs rising faster than revenue, profit margins are being squeezed and some businesses are slipping into losses.

High lending interest rates and difficulties accessing finance remain persistent obstacles.

During the first nine months of the year, nearly 224,000 businesses entered or re-entered the market, compared with approximately 172,000 that withdrew.

These figures reveal how fragmented Vietnam's economic structure remains.

Based on statistics published through 2020, household businesses contributed nearly 30% of GDP, roughly three times the share generated by formally registered private enterprises.

More than 6.1 million household businesses continue to operate as small shops, restaurants and workshops, where owners typically provide the capital, perform much of the work themselves and search for customers.

For many households, running a business is primarily a means of supporting the family.

With limited capital and thin profit margins, the journey toward becoming an organized, competitive enterprise remains a long one.

This is why the non-state sector's 51% share of GDP must be considered alongside its internal structure.

A large contribution to national output does not necessarily mean Vietnam has developed a strong and mature private corporate sector.

The economy still depends heavily on millions of small establishments, while many enterprises continue struggling to secure customers, accumulate capital and expand.

Vietnamese GDP per capita remains around one-third of the global average

A fragmented private sector dominated by small businesses is poorly positioned to generate large numbers of secure, well-paid jobs.

Most employed Vietnamese workers remain in the informal sector.

Many earn their living through jobs without formal contracts, social insurance or stable incomes.

A few days without customers, a shortage of temporary work or a failed farming season can disrupt an entire household's finances.

In the third quarter of 2026, Vietnam's unemployment rate among working-age people stood at just 2.22%.

However, the informal employment rate reached 60.6%, according to the National Statistics Office.

Young people face even greater difficulties than the headline unemployment figure suggests.

Unemployment among people aged 15-24 reached 9.07% in the third quarter.

For the first nine months of 2026, the youth unemployment rate averaged nearly 8.9%, its highest level during the 2020-2026 period.

Average monthly worker income during the first nine months exceeded approximately $351, up 9.1% year-on-year.

However, the consumer price index (CPI) rose 4.52% over the same period, meaning the improvement in purchasing power was smaller than the increase in nominal income.

Moreover, those earnings often have to support family members who are unemployed or no longer working.

These figures show that most Vietnamese workers remain employed in the informal economy, where earnings are often relatively modest compared with the cost of meeting basic living needs.

GDP per capita offers another perspective on the limited economic resources available to much of the population, particularly in mountainous provinces.

According to the Statistical Yearbook 2025, Vietnam's national GDP per capita averaged approximately $4,844, equivalent to about 35% of the global average based on World Bank data.

Of the localities included in the figures, only 11 exceeded the national average, while 52 fell below it.

In 2025, GDP per capita in the former Bac Kan Province reached approximately $2,400, equivalent to around 17% of the global average.

The corresponding figures were about $2,061 in Dien Bien, or 15%; $1,914 in Cao Bang, or nearly 14%; and $1,655 in Ha Giang, or just 12%.

These figures illustrate how far many Vietnamese localities remain from average global levels of economic development.

Even the former Ba Ria - Vung Tau Province, which topped the rankings with GDP per capita of approximately $13,388, was only at around 96% of the world average.

That was despite its GDP per capita being 8.1 times higher than Ha Giang's.

Although these figures do not represent the actual take-home income of residents, they demonstrate that the economic foundations of many localities remain relatively weak.

There is still a long road between achieving high national growth rates and delivering a comfortable standard of living for most Vietnamese people.

The disparity also serves as a reminder that development gains remain unevenly distributed and that national averages can conceal substantial economic hardship in individual localities.

Turning economic growth into lasting prosperity

Vietnam's GDP reached approximately $514.7 billion in 2025, equivalent to 0.435% of the global economy.

Put simply, for every $200 worth of economic output generated worldwide, Vietnam accounted for less than $1.

Gross national income (GNI) offers another perspective on the country's underlying economic strength.

According to calculations by economist Dr. Bui Trinh, Vietnam's GNI was approximately 1.4% lower than its GDP in 2000.

In recent years, GNI has been equivalent to roughly 95% of GDP.

He estimated that property income payments abroad amounted to approximately $18-20 billion annually during 2022-2025.

Vietnam's export and manufacturing figures demonstrate that the country has become a major global production base.

Yet the number of domestic enterprises capable of participating deeply in these activities remains limited.

At home, millions of household businesses continue to carry a substantial share of the economy, most operating on a small scale with modest financial resources.

This brings the discussion back to the fundamental question behind Vietnam's expanding GDP: how much value can domestic enterprises retain, which stages of production can they truly control, and what kinds of incomes can the jobs they create provide?

The evidence suggests that Vietnam is still starting from a relatively low economic base, with considerable ground left to cover.

A traditional Vietnamese saying holds that people's basic material needs must be met before higher aspirations can be pursued.

For Vietnam to invest more in hospitals, schools, scientific research and national defense, while strengthening its standing internationally, the country must generate more wealth.

More importantly, it must ensure that a greater share of that wealth and economic value is retained by Vietnamese businesses and people.

Tu Giang - Lan Anh