Germany’s international broadcaster Deutsche Welle (DW) recently published an article highlighting the key factors behind Vietnam’s robust economic growth. According to the World Bank, Vietnam’s GDP is projected to grow by 6.1% by the end of 2024, and by 6.5% in 2025. Both forecasts mark an upward revision from earlier predictions in April, with the boost in growth linked to a resurgence in manufacturing exports, tourism, and investment.
The report also noted that Vietnam is likely to outpace other emerging economies such as Thailand, Cambodia, Malaysia, Indonesia, and the Philippines in 2025. Foreign direct investment (FDI) was cited as a major driver of this growth, as Vietnam, like many of its Southeast Asian neighbors, relies heavily on FDI to fuel its economy.
According to the ASEAN Investment Report 2024, Vietnam, along with Thailand, Indonesia, Malaysia, Singapore, and the Philippines, attracted an average of 236 billion USD in FDI annually between 2021 and 2023. The article emphasized that Southeast Asia is increasingly becoming a preferred destination for foreign investment from the US, Japan, and the EU, as companies seek to diversify supply chains amidst global geopolitical tensions.
Vietnam, in particular, has benefited from the “China-plus-one” strategy, with its geographical proximity and cultural similarities making it an attractive alternative for firms looking to reduce reliance on China. Dr. Bich Tran, an adjunct fellow at the Centre for Strategic and International Studies, noted that Vietnam is one of the top choices under this policy.
The US has become Vietnam’s second-largest trading partner and its largest export market. The two countries elevated their diplomatic relationship to a comprehensive strategic partnership in 2023, further enhancing economic cooperation. This stronger bilateral relationship has spurred significant investments, particularly from US companies. The article pointed out that US tech giant Apple has invested over 15 billion USD in Vietnam over the past five years, making the country a crucial manufacturing hub for the company.
Vietnam’s attractiveness as an investment destination is further bolstered by its low labor costs and youthful population, with 58% of its nearly 100 million people under the age of 35. These factors, according to the article, make Vietnam a compelling option for foreign investors seeking growth opportunities.
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Source: Vietnam Insider