Impressive economic growth

For many years, the World Bank (WB) has consistently recognised Vietnam’s remarkable development achievements, especially since the Doi Moi (Renovation) process, considering the country a success story. Economic reforms from 1986, combined with globalisation trends, quickly helped Vietnam rise from one of the poorest countries to a lower-middle-income economy.

According to the National Statistics Office, Vietnam’s GDP stood at only VND 41.955 trillion in 1990, surpassed VND100 trillion in 1992, and reached VND1 quadrillion in 2006. Despite global economic crises and the heavy toll of the COVID-19 pandemic, its GDP growth remained stable and resilient.

The country’s GDP reached approximately VND10.32 quadrillion in 2023 and rose to over VND11.5 quadrillion (US$476.3 billion) a year later, a 59.5-fold increase compared to US$8 billion in 1986. As a result, its economy was the fourth largest in Southeast Asia and the 34th largest in the world. Gross National Income (GNI) at current prices also surged nearly 249 times from 1990, reaching approximately VND9.79 quadrillion in 2023.

Vietnam’s per capita income in 2024 hit US$4,700, a nearly 55-fold increase compared to just US$86 per person in 1988, when the country began opening its economy, and 4.7 times higher than US$1,000 in 2007 when it joined the World Trade Organisation (WTO). This sets the stage for Vietnam to soon cross the threshold into the high middle-income bracket by international standards.

“Renovation has been the driving force of economic development for four decades, abolishing the administrative command management and subsidy mechanisms,” said Nguyen Bich Lam, former director of the National Statistics Office. “The country overcame crises and became one of the most dynamic economies, with a remarkable GDP growth.”

According to Dr. Can Van Luc, chief economist at the Bank for Investment and Development of Vietnam (BIDV), the period 2006-2025 marks a breakthrough growth journey for Vietnam, with nominal GDP per capita increasing from around US$700 in 2006 to an estimated US$5,000 in 2025 which is more than seven times in less than two decades, corresponding to an average annual growth rate in the double digits.

“This is not only an economic achievement but also the result of sound policy direction from the Party and Government, along with the innovative spirit of the business community,” he noted.

An ambitious goal

From an institutional perspective, Prof. Dr. Tran Dinh Thien, former director of the Vietnam Institute of Economics, pointed out that four recent resolutions from the Politburo form the pillars for the country’s development strategy. They are promoting the private sector; building a proactive development state; driving innovation, science and technology, and digital transformation; and deepening global integration and cooperation.

Notably, Resolution 68 on private sector development sets ambitious goals and underscores the determination to make it the main engine of the economy. The government has emphasised the need to remove all barriers for private enterprises, ensure a competitive market environment, and provide tailored incentives for startups and innovation-driven businesses.

“When implementing Resolution 68, the Government made it clear that there would be no limits for private enterprises. The remaining challenge lies in the efforts of businesses and the active support from ministries and localities to translate this resolution into reality,” remarked Prof. Thien.

Dr. Luc said, if Vietnam achieves an average GDP growth rate of 9% per year during 2026-2030 and 8% on average during 2031-2045, then by the end of 2045, the per capita national income (GNI) is estimated to reach US$22,600. He therefore said he believes Vietnam does not necessarily need to pursue double-digit growth at all costs in the next 10-20 years to achieve the goal of becoming a developed, high-income country by 2045 as planned.

Vietnam needs to develop quickly but also sustainably and inclusively, ensuring macroeconomic stability, political-social security, and environmental protection, he said.

Inflation should be controlled below 5%, budget deficits at 4-4.5%, and public debt below 60% of GDP under all circumstances. Especially, economic growth should not be traded off at the expense of environmental pollution and macroeconomic instability.

“To do so, factors related to the structure, quality, and efficiency of growth must be ensured. Regarding economic structure, we need to consider an appropriate proportion of agriculture to ensure both food security and quality and value. Then, the industrial-construction and service sectors should be balanced accordingly, requiring specific calculations,” Dr. Luc emphasised.

Dr. Luc also noted that growth must be accompanied by risk control and improved effectiveness and efficiency of implementation. It is essential to ensure the successful operation of new provinces and cities with a two-tier local government model, where the governance capacity of leaders, the execution ability of the public apparatus, and the application of technology, data, and simplification of procedures at administrative service centres are critical.

A look at Vietnam’s economic growth over 40 years

VOV.VN - After 40 years of renovation, Vietnam is now the world’s 33rd largest economy, with GDP per capita up more than 60 times and among the top 30 countries for trade growth.