Vietnam’s economy achieved success in 2024, with a growth rate of 7.09%, surpassing the target of 6.5% to 7% set by the National Assembly.

According to the General Statistics Office (GSO), the agriculture, forestry, and fisheries sector grew by 3.27%, contributing 5.37% to the overall growth; the industry and construction sector increased by 8.24%, contributing 45.17%; and the services sector 7.38% and 49.46%, respectively. Traditional growth drivers The success in 2024 continued to hinge on traditional growth drivers. For the aggregate demand, the GSO figures show that exports reached a record high of US$405.53 billion, up 14.3% over 2023. The achievement was contributed mainly by the foreign direct investment (FDI) sector, with US$290.8 billion, including crude oil revenue, rising 12.2% over 2023 and accounting for 71.8% of the total exports. The trade surplus was US$24.77 billion. The FDI sector gained a trade surplus of US$47.5 billion, excluding crude oil, according to figures from the Foreign Investment Agency under the Ministry of Planning and Investment. According to the GSO, the domestic sector incurred a trade deficit of US$25.4 billion. The trade surplus of US$17.9 billion in the agriculture, forestry, and fisheries sectors partly compensated for the deficit. With an import-export turnover of up to US$786.29 billion in 2024, the openness of the economy via the import-export turnover/GDP is 165%. As assessed by many experts, the recovery of global trade, which reached US$33 trillion in 2024, up 2.7% over 2023, backed export-oriented economies like Vietnam. Global trade is forecast to continue rising, estimated at 3% in 2025, which is the foundation to determine that exports are a driver for Vietnam’s economic growth in 2025. Nevertheless, over the long term, it needs to gradually reduce its dependence on exports and find new growth drivers. At the seminar “Vietnam Macro-economy: Review for 2024 and Prospect for 2025” held by VnEconomy on January 3, 2025, Dr. Can Van Luc, chief economist at the Bank for Investment and Development of Vietnam (BIDV), said that in view of aggregate demand, net exports contributed only 0.66% of economic growth in 2024. That said, economic growth in the future still hinges on two remaining components—investment and final consumption, that is, on the internal strength of Vietnam’s economy. According to Luc, investment contributed 37% of overall economic growth in 2024. However, apart from many positive points, there are still concerns. The GSO figures show that the total investment in current prices was VND3,692,100 billion, up 7.5% over 2023, above the 2023 figure of 6.6%. Private investment was VND726,600 billion, up 8.7% over 2023 but still lower than the average growth of 15.5% per year from 2016 to 2019. Disbursement of public investment by end-November 2024 was estimated at VND410,953.1 billion, equivalent to 54.8% of the target; therefore, it is highly likely that full-year disbursement could not reach 81% of the target as achieved in 2023. According to the calculation of the GSO, a 1% increase in public investment will contribute 0.06% of GDP growth. That said, public investment in 2024 did not make much direct contribution to overall economic growth. Though the improvement in public investment disbursement makes specific results for economic development, the quality of public investment and the ripple effect from public investment projects are the most critical factors for stable, sustainable economic growth. Final consumption in 2024, including public spending, increased 6.57% over 2023. The deficit in service trade was US$12.34 billion, way above the 2023 number of US$9.47 billion. At the seminar, Nguyen Duc Hung Linh, an economic expert at Think Future, cited one of the fundamental reasons with an example that his family opted for a tour of Thailand instead of a vacation on Phu Quoc Island because the domestic airfare was much higher than the airfares for many regional destinations. Towards a new growth model In view of aggregate supply, the agriculture, forestry, and fisheries sectors contributed 5.37% of the increase in the total added value of the economy in 2024. Luc said this was a very low figure compared with some 10% of other economic sectors. Further, since the agriculture sector makes up less than 20% of the GDP of the economy, it needs reinvestment, which for Vietnam means upgrading the logistics infrastructure and training human resources for logistics. Regarding business activities, over 233,400 businesses were newly registered and resuming operations in 2024, up 7.1% over 2023, averaging nearly 19,500 per month. The number of businesses leaving the market was 197,900, up 14.7% year-on-year, averaging nearly 16,500 per month. That said, the number of businesses resuming operations is higher than the number leaving the market, though the gap is not very big. Credit growth had reached only 13.82% by December 15, 2024, failing to achieve the target of 15% set at the start of the year. However, the growth was spread evenly throughout the year, not being pressed over the final months as in 2023. Still, Pham Xuan Hoe, general secretary of the Vietnam Finance Leasing Association, noted that M2 money supply in 2024 increased only some 8%, and the money velocity was 0.65%, indicating that businesses are still short of money. This can ultimately be rectified if public investment disbursement is better, releasing hundreds of billions of dong sitting “idly” in the State Treasury. A highlight with a possible positive impact on Vietnam’s economy is the trend of shifting semiconductor and high-tech investment and manufacturing to Asia. Signs from Nvidia and Amkor last year indicated that Vietnam is one of the destinations to consider. Vietnam is determined to attract this investment flow and has prepared infrastructure, technology, and manpower; the matter is whether the country is fast enough and good enough to grasp the opportunity. In its resolution for socio-economic development in 2025, the National Assembly set the GDP growth target between 6.5% and 7% and expected 7% to 7.5% growth, while the Government hoped for 8% growth. To reach this target and pave the way for higher growth in the following years, the identification and establishment of a new growth driver and model is obligatory. Experts at the seminar agreed that institutional reform needs to continue. However, to avoid incomplete policy adjustment, the reform must be implemented in a comprehensive manner based on the development strategy of each sector, each area, and even the whole economy over the short term and the roadmap for the future. Institutional reform must accompany synchronized infrastructure and human resource development for new economic models such as digital, green, and circular economies. Regarding capital for the green economy, Vietnam can consider establishing a refinancing fund of the central bank or a green bank model to assess and finance eligible projects, according to Hoe.