Vietnam’s Ascent: Navigating Toward Top 25 Global Economies by 2038

With China as the country’s largest trading partner, its proximity and many similarities, it is almost imposible to think about Vietnam without considering the global superpower right next door! Capitalizing on its young population, booming economy and appetite for advanced technology, Vietnam is poised to surpass many ASEAN countries and aims to become among the top 25 global economies by 2038. Through strategic investment in infrastructure, increased labor productivity, internal reforms and value chain repositioning, Vietnam serves as an example on how to improve a country’s global ranking in a timely manner. According to the Center for Economics and Business Research (CEBR), Vietnam is expected to rank 33rd in World Economic League Table (WELT) in 2024. The country’s global ranking is anticipated to rise promptly reaching the 24th position in 2033 prior to becoming the 21st largest economy in the world by 2038.

Some global companies such as Intel and Apple have already started diversifying their supply chain by investing in Vietnamese facilities as US seeks an Asian manufacturing alternative to China. This is as Vietnam is increasingly taking over functions from China in the manufacturing industry. The country is experiencing rapid industrialisation and urbanisationseems making it well positioned to greatly benefit from the global corporate trend of diversifying supply chains and outsourcing production. Today, the country is considered a manufacturing hub as the industry remains a key driver of the export-oriented economy of Vietnam. This is thanks to its strategic location in the Southeast Region, stable political system and the availablity as well as afordabilty of its labor force. According to the General Statistics Office (GSO), Vietnam’s GDP growth rate is among the highest in the region and the world.

Thriving Trends: Vietnam’s Retail Sector on the Rise

The retail and consumer industry is also poised for a significant growth driven by good business conditions and encouraging macroeconomic factors. Total retail sales in December of 2023 registered a 2.6 percentage points increase from the month prior and a surprising 9.3 percent increase from the same period in 2022 as refelected in the latest data from the Ministry of Industry and Trade. The total real consumer spending is forecasted to continuously increase between 2024 and 2029 by over 37 percent, according to Statista. The country’s economy shows signs of further expansion and improvement as consumer demand rises, export revenue increases and Foreign Direct investment (FDI) surges.

With a population of over 97 million and APAC’s fastest growing middle class combined with the speedy adoptation of cutting-edge technology and a high degree of market openness, Vietnam is now leading the region in Foreign Direct Investment (FDI) value and one of the countries with the most FTAs in the world. Vietnam is expected to become a major driver of the global trade growth surpassing the global average by the year 2030.