Vietnam is poised to surpass Thailand as Southeast Asia’s economic powerhouse, with GDP growth projected at up to 8% for 2025, outpacing regional competitors. Strong foreign direct investment, especially in manufacturing and high-tech sectors, fuels its rise, while extensive infrastructure development and digital transformation further enhance economic appeal. Export growth, supported by global demand and trade agreements, continues to drive expansion. As policy reforms accelerate and investment strategies mature, critical dynamics shaping this shift become increasingly apparent beyond these initial insights.
Although Vietnam has faced global economic headwinds in recent years, the country’s economic trajectory remains particularly robust, with projections indicating GDP growth rates of 6.8% in 2025 and 6.5% in 2026, according to the World Bank. This outlook positions Vietnam to outpace many of its Southeast Asian neighbors, including Thailand, due to its strong performance in manufacturing and export activities.
Significantly, Vietnam’s parliament has revised its GDP growth target for 2025 upwards, with discussions suggesting a range up to 8%, reflecting increasing confidence in the economy’s resilience. The United Nations’ forecasts additionally reinforce this optimism, expecting growth to reach 6.5% in 2025, a clear improvement over the previous year. The country’s service sector also plays a crucial role, now contributing over 43% to the overall economic structure and supporting Vietnam’s continued expansion.
Vietnam raises its 2025 GDP target to as high as 8%, signaling growing confidence and a robust economic outlook.
A significant driver behind Vietnam’s rise is the steady inflow of foreign direct investment, projected to remain consistent at approximately $25 billion disbursed annually. The country’s appeal to global investors is rooted in its business-friendly economic policies, strategic geographic location, and ongoing advancements in infrastructure. The World Bank highlights the need to ramp up public investment as a strategy for sustaining growth and cushioning against global uncertainties.
In particular, the manufacturing and high-tech sectors have attracted robust FDI, supporting Vietnam’s integration into global supply chains. Infrastructure development, marked by increased investment in transport, urban, and energy projects, is set to enhance economic stability and support broader growth objectives. Additionally, Vietnam’s commitment to digital transformation is seen as essential for maintaining its growth momentum and competitiveness in the region.
Vietnam’s export sector has rebounded, driven by global demand for technology products, although the country remains exposed to risks from global trade uncertainties and policy shifts. Participation in regional trade agreements has expanded Vietnam’s export markets, while efforts to diversify exports beyond manufacturing and into services are underway to sustain long-term growth.
At the same time, public investment strategies are recommended to offset external economic risks, with efficient public spending and accelerated project clearance expected to boost the real estate sector and infrastructure build-out. Despite challenges in scaling up infrastructure investment efficiently and managing vulnerabilities to global economic changes, Vietnam’s strong manufacturing base, growing domestic demand, and improved policy implementation position it to potentially surpass Thailand as Southeast Asia’s leading economic powerhouse.
