The economy of Vietnam is a socialist-oriented market economy, which is the 36th-largest in the world as measured by nominal gross domestic product (GDP) and 23rd-largest in the world as measured by purchasing power parity (PPP). Vietnam has become a leading agricultural exporter and served as an attractive destination for foreign investment in Southeast Asia. Vietnam may be the fastest-growing of the world’s economies, with a potential annual GDP growth rate of about 5.1%, which would make its economy the 20th-largest in the world by 2050.
The following tables and chart will tell the change details in last 5-10 years:
Vietnam Distribution of workforce from the last 5 years:
Vietnam Distribution of GDP across economic sectors:
Here attached the last 10 years chart of Vietnam GDP: (amount in billion USD):
3 Sectors of the Economy – Agriculture, Industry and Services:
Agriculture is an important part in the Vietnam’s economy. It employs almost 37.36% of the total workforce and contributed almost 13.96% in GDP.
Vietnam ranks 16th in the world in terms of exports of agricultural, forestry and aquatic products, with a number of main items with an annual export turnover of over USD 1 billion, i.e., rice, vegetables, coffee, cashew, rubber, timber and wood products, seafood (shrimp and pangasius).
The Ministry of Agriculture and Rural Development sets a target that by 2025, the export value of agricultural, forestry and fishery products of Vietnam will reach about USD 50-51 billion and increase to USD 60 – 62 billion by 2030.
Major products in this Sector:
Rice: Vietnam is the world’s fifth-largest rice–producing country. In 2020, the production volume of rice paddy in Vietnam amounted to around 42.7 million metric tons, indicating a slight decrease from the previous year. Vietnam is among the leading rice producing and exporting countries worldwide. Vietnam earned over US$3 billion from exporting rice in 2020, according to the Vietnam Food Association (VFA), a year-on-year increase of more than 10%.
Cashew Nut: Vietnam has maintained its position as the world’s largest producer and exporter of cashew nuts in 2020. In 2020, approximately 511 thousand tons of cashew nuts were produced in Vietnam, indicating an increase in production volume from the previous year. Since 2016, this was the highest volume of production recorded in the given timeline. For the whole year 2020, the export of cashew nuts is estimated at 450 thousand tons, worth $ 3.19 billion, up 12.1% in volume, but down 3% in value compared to 2019.
Coffee: Vietnam is the second largest producer in the world after Brazil. There are two main types of coffee (Robusta and Arabica) in Vietnam. While Robusta accounts for 92.9% of the total coffee area (and accounts for 97% of the total production), the Arabica varieties are only responsible for a few percent. The total area covered by coffee cultivation is estimated at 600,000 ha.
Agriculture Subsidy in Vietnam:
The overall level of support provided to Viet Nam’s agricultural sector fluctuates at low or negative levels, largely driven by changes in market price support (MPS). In 2017-19, Viet Nam’s producer support estimate (PSE) was negative at –7.1% of gross farm receipts. MPS varies across commodities.
In December 2018, the Ministry of Agriculture and Rural Development (MARD) issued a list of 13 key national products, which includes rice, coffee, rubber, cashews, pepper, tea, vegetables and fruits, cassava and products thereof, pig meat, poultry meat and eggs. The 13 products are eligible for preferential support measures, including exemptions from or reductions in land or water surface rents; preferential credit; support for the transfer and the application of high-technology in agriculture, human resources training, and market development and promotion activities; and support for investments in facilities and equipment for processing or preserving agricultural products.
Industry is an important part in the Vietnam’s economy. It accounts for 34.49% of GDP and employed almost 27.64% of the workforce.
Major Industries in this Sector:
Electrical and electronics: Vietnam’s electronics industry (EI) is one of the fastest-growing and most crucial industries in Vietnam.In 2019, electronic industry exports amounted to 36 percent of total exports from Vietnam, increasing by 1.15 percent compared to 2018. Imports accounted for 30 percent of total import flow, increasing by 2.01 percent from 2018. Of this, sales of electronics from Vietnam also went up by 12.1 percent, compared to 2018. Vietnam has climbed the ranks as a key electronics exporter, from a modest 47th place in 2001 to 12th place in 2019. Especially, mobile phone exports were ranked second worldwide, with a value of over US$50 billion in 2019.
Footwear: Vietnam is known for its highly developed footwear manufacturing industry and it’s currently the world’s 2nd largest footwear exporter after China. Vietnam’s footwear export economy is worth $22B/year which is almost 6% of the total Vietnam export. The largest footwear brands, such as Nike and Adidas, are moving production to Vietnam. The market is expected to grow annually by 6.42% (CAGR 2021-2025).
Service sector is an important part in the Vietnam’s economy. It contributes almost 41.64% in the GDP and employed almost 34% of the total Vietnam’s workforce.
Major Industries in this Sector:
Finance: In 2020, Vietnam’s financial, banking and insurance sector accounted for 5.37 percent of the country’s total GDP. In that year, Vietnam’s GDP was at 6,293 trillion Vietnamese dong. According to Moody’s, the outlook for Vietnam’s banking system is positive, due to the country’s strong economic prospects and a positive outlook for most of the rated banks in Vietnam. The top banks in Vietnam are VietinBank, Agribank, Vietcombank, BIDV, Military Bank.
Tourism: Tourism has become one of the major sectors within the economy of Vietnam in recent years, with a direct GDP contribution of over nine percent in 2019. In the same year, Vietnam also welcomed a record-high number of international visitor arrivals. According to the Vietnam National Administration of Tourism (VNAT), the country’s tourism sector directly employed around 750,000 workers in this sector. Vietnam is known for its long coastline, rice terraces, and old French-colonial architecture within bustling, modern cities.
Top Companies in Vietnam:
|Company Name||Sector||Market Cap (Trillion VND)|
|Vin Homes||Real Estate||349.01|
|Hoa Phat Group||Conglomerate||224.98|
|Petrovietnam||Oil and Gas||167.27|