Vietnam Economic Forecast

Economy of Vietnam  


Currency Vietnamese dong
Calendar year
Trade organisations

$198.8 billion (nominal, 2015 est.)

$551.3 billion (PPP, 2015 est.)
GDP growth
6.68% (2015 est.) 
GDP per capita

$2,073 (nominal, 2014 est.)

$6,100 (PPP, 2015 est.)
GDP by sector
Agriculture: 17.00%, industry: 33.25%, services: 49.75% (2015 est.)
2.05% (2015 est.)
Population belowpoverty line
7%-7.2% (2015 est.)
38.2 (2014)
Labour force
54.61 million (2015 est.)
Labour force by occupation
Agriculture: 44.3%, industry: 22.9%, services: 32,8% (2015 est.)
Unemployment 2.31 % (2015)
Main industries
paddy ricecoffeerubber,cottonteapeppersoybeans, cashews, sugar cane,peanutsbananaspoultry,fishseafood
Exports $162.11 billion (2015)
Export goods
clothesshoesmarineproducts, crude oilelectronics,wooden products, ricecoffee,machinery
Main export partners
 United States 20.9%
 China 11.7%
 Japan 10.6%
 South Korea 7.1%
 Hong Kong 5.8%
 India 4.9% (2013 est.)
Imports $165.65 billion (2015)
Import goods
machinery and equipment,petroleum products, steelproducts, raw materials for theclothing and shoe industries,electronicsplastics,automobiles
Main import partners
 China 30.2%
 South Korea 16.0%
 Japan 9.5%
 Taiwan 7.3%
 Thailand 6.3%
 Singapore 5.8% (2013 est.)
FDI stock
US100.5 billion (2015)
US$69.76 billion (Dec 2014 est.)
Public finances
52.7% of GDP (2014)
Revenues US$39.61 billion (2015 est.)
Expenses US$47.39 billion (2015 est.)
Economic aid US$4.115 billion pledged (2012)
Standard & Poor's:
BB- (Domestic)
BB- (Foreign)
BB- (T&C Assessment)
Outlook: Stable
Outlook: Stable
Outlook: Stable

All values, unless otherwise stated, are in US dollars.

Vietnam's socialist oriented market economy is a developing planned economyand market economy. Since the mid-1980s, through the Đổi Mới reform period,Vietnam has made a shift from a highly centralized planned economy to amixed economy which use both directive and indicative planning (see Five-Year Plans of Vietnam). Over that period, the economy has experienced rapid growth. In the twenty-first century, Vietnam is in a period of being integrated into the global economy. Almost all Vietnamese enterprises are small and medium enterprises (SMEs). Vietnam has become a leading agricultural exporter and served as an attractive destination for foreign investment inSoutheast Asia. In a similar fashion to other Communist countries after the end of the Cold War the planned economy of Vietnam lost the momentum for productivity and sustainable growth. In the current period the economy of Vietnam relies largely on foreign direct investment to attract the capital from overseas to support its continual economic rigorousness.

In 2013, the nominal GDP reached US$170.565 billion, with nominal GDP per capita of US$1,902. According to a forecast in December 2005 by Goldman Sachs, the Vietnamese economy was expected to become the 35th largest economy in the world with nominal GDP of US$436 billion and nominal GDP per capita of US$4,357 by 2020. According to a forecast by thePricewaterhouseCoopers in 2008, Vietnam may be the fastest-growing of the world's emerging economies by 2020, with a potential annual growth rate of about 10% in real terms, which would increase the size of the economy to 70% of the size of the UK economy by 2040.

Vietnam has been named among the Next Eleven and CIVETS countries. Despite economic achievement following Doi Moi, there exist issues that cause many analysts and researchers to remain worried about the economic slowdown in the country in recent years

Economic History of Vietnam

Civilization in Vietnam had been built on agriculture. The feudal dynasties always considered agriculture as the main economic base, and their economic thoughts have been predicated on physiocracy. Land ownership was regulated, and such large-scale works as dykes were constructed in the Red River Delta to facilitate wet rice cultivation. In peaceful times, soldiers were sent home to do farm work. Furthermore, the court prohibited slaughtering water buffalo and cattle and held many agriculture-related ceremonies. Handicrafts and art were valued, but commerce was deprecated, and businessmen were called by the derogatory term con buôn. The national economy was self-sufficient.

From the 16th century, Confucianism was losing its influence on Vietnamese society and a monetary economy began to develop. Early commercial ports, such as Hội An, were constrained, and foreign countries with their different cultures and their invasion ambitions were seen as a threat. This policy of closure led to a degree of stagnation in the Vietnamese economy, and contributed to Vietnam becoming a French colony.

Until the French colonization in the mid-19th century, Vietnam's economy had been mostly agrarian, subsistence-based and village-oriented. French colonizers, however, deliberately developed the regions differently as the French needed raw materials and a market for French manufactured goods, designating the South for agricultural production as it was better suited for agriculture, and the North for manufacturing as it was naturally wealthy in mineral resources. Though the plan exaggerated regional divisions, the development of exports — coal from the North, rice from the South — and the importation of French manufactured goods stimulated domestic commerce.[15] The separation distorted the basic Vietnamese economy by overly stressing regional economic differences. In the South, while irrigated rice remained the principal subsistence crop, the French introduced plantation agriculture with products such as tea, cotton, and tobacco. The colonial government also developed some extractive industries, such as the mining of coal, iron, and nonferrous metals. A shipbuilding industry was begun in Hanoi; railroads, roads, power stations, and hydraulics works were constructed. In the South, agricultural development concentrated on rice cultivation, and, nationally, rice and rubber were the main items of export. Domestic and foreign trade were centered around the Saigon-Cholon area. Industry in the South consisted mostly of food-processing plants and factories producing consumer goods.

The development of exports—coal from the North, rice from the South—and the importation of French manufactured goods, however, stimulated internal commerce. A pattern of trade developed whereby rice from the South was exchanged for coal and manufactured goods from the North.

When the North and South were divided politically in 1954, they also adopted different economic ideologies: communism in the North and capitalism in the South. Destruction caused by the Second Indochina War from 1954 to 1975 seriously strained the economy. The situation was worsened by the country's 1.5 million military and civilian deaths, and the subsequent exodus of 1 million refugees, including tens of thousands of professionals, intellectuals, technicians and skilled workers.

The government's Second Five-Year Plan (1976–1981) aimed for extraordinarily high annual growth rates in industrial and agricultural sectors and national income and sought to integrate the North and the South, but the goals were not attained. The economy remained dominated by small-scale production, low labor productivityunemployment, material and technological shortfalls, and insufficient food and consumer goods. The more modest goals of the Third Five-Year Plan(1981–85) were a compromise between ideological and pragmatic factions; they emphasized the development of agriculture and industry. Efforts were also made to decentralize planning and improve the managerial skills of government officials.

Since reunification in 1975, the economy of Vietnam has been plagued by enormous difficulties in production, imbalances in supply and demand, inefficiencies in distribution and circulation, soaring inflation rates, and rising debt problems. Vietnam is one of the few countries in modern history to experience a sharp economic deterioration in a postwar reconstruction period. Its peacetime economy is one of the poorest in the world and has shown a negative to very slow growth in total national output as well as in agricultural and industrial production. Vietnam's gross domestic product ( GDP) in 1984 was valued at US$18.1 billion with a per capita income estimated to be between US$200 and US$300 per year. Reasons for this mediocre economic performance have included severe climatic conditions that afflicted agricultural crops, bureaucratic mismanagement, elimination of private ownership, extinction of entrepreneurial classes in the South, and military occupation of Cambodia (which resulted in a cutoff of much-needed international aid for reconstruction).

From the late 1970s until the early 1990s, Vietnam was a member of the Comecon, and therefore was heavily dependent on trade with the Soviet Union and its allies. Following the dissolution of the Comecon and the loss of its traditional trading partners, Vietnam was forced to liberalize trade, devalue its exchange rate to increase exports, and embark on a policy of economic development.

In 1986, Vietnam launched a political and economic renewal campaign (Đổi Mới) that introduced reforms to facilitate the transition from a centralized economy to a "socialist-oriented market economy". Đổi Mới combined government planning withfree-market incentives and encouraged the establishment of private businesses and foreign investment, including foreign-owned enterprises. Furthermore, the Vietnam government stressed the necessity to lower birth rates when developing the economic and social rights of the population by implementing a policy which restricted the number of children per household to two, called the two-child policy.  By the late 1990s, the success of the business and agricultural reforms ushered in under Đổi Mới was evident. More than 30,000 private businesses had been created, the economy was growing at an annual rate of more than 7%, and poverty was nearly halved.