VIETNAM CHAMBER OF COMMERCE AND INDUSTRY
Liên Đoàn Thương Mại Và Công Nghiệp Việt Nam
Mon, Jan 27, 2025, 14:19:00
Enhancing labor productivity is a key driver for achieving rapid and sustainable growth
GDP growth of 7.09% beats the NA’s target (6-6.5%)
At its recent press conference on socioeconomic statistics in 2024, GSO Director General Nguyen Thi Huong said that in 2024, the agriculture, forestry and fishery sector grew by 3.27%, the industry and construction sector by 8.24%, and the service sector by 7.38%, contributing 5.37%, 45.17% and 49.46%, respectively, to the total added value increase of the economy. Final consumption expanded by 6.57%, asset accumulation rose by 7.20%, merchandise and service exports surged by 15.45%, and merchandise and service imports increased by 16.10%.
The GDP in 2024 was estimated at VND11,511.9 trillion (US$476.3 billion), with the GDP per capita forecast at VND114 million (US$ 4,700), reflecting an increase of US$377 from 2023. Labor productivity of the entire economy in 2024 was projected at VND221.9 million per worker. At comparable prices, labor productivity rose by 5.88% on improved labor qualifications (the rate of certified trained workers was forecast at 28.3% in 2024, 1.1 percentage points higher than in 2023).
CPI rises 3.63% as expected by the NA
According to the GSO report, the consumer price index (CPI) rose by 3.63% in 2024, in line with the expectations of the National Assembly (NA). Among 11 main consumer goods baskets, five increased in price and one declined in price. The price index of the food and catering services basket advanced 4.03% from the previous year, causing the headline CPI to gain by 1.35 percentage points.
The price index of the housing, electricity, water, fuel and construction materials basket leaped 5.2%, adding 0.98 percentage points to the headline CPI, mainly because the household electricity price index soared 7.68% on increased electricity demand, along with EVN's revising up the average retail electricity price, adding 0.25 percentage points to the headline CPI. The housing rent index looked up 4.6% on increased demand for rental housing, causing the CPI to rise by 0.48 percentage points. In addition, the domestic water price index in 2024 surged 8.33% from the previous year.
The price index of drugs and medical services surged 7.16%, adding 0.39 percentage points to the headline CPI, on revised medical service prices according to Circular 22/2023/TT-BYT from November 17, 2023 and Circular 21/2024/TT-BYT from October 17, 2024 of the Ministry of Health.
The price index of the education basket increased 5.37% because some localities increased tuition fees in the 2023-2024 and 2024-2025 school years, adding 0.33 percentage points to the headline CPI. The price index of the transport category edged up 0.76%, resulting in a slight increase of 0.07 percentage points to the headline CPI. The price index of the post and telecommunications basket in 2024 slipped 1.02% from 2023 due to falling prices of old-generation phones when retailers applied discount programs to stimulate demand for smartphones introduced to the market.
On average, in 2024, core inflation rose by 2.71% from a year earlier, lower than the headline CPI growth (3.63%), mainly due to the growing prices of foods, electricity, education services and medical services, which were excluded from core inflation but affected the headline inflation.
In 2024, the total export and import value of goods surged 15.4% year-on-year, totaling US$786.29 billion
Merchandise exports and imports total US$786.29 billion
In 2024, the total export and import value of goods increased by 15.4% year on year, reaching US$786.29 billion, with exports rising by 14.3% and imports by 16.7%. The trade balance ran a surplus of US$24.77 billion. The United States was Vietnam's largest export market with US$119.6 billion in turnover. China was Vietnam's largest import market with US$144.3 billion in turnover.
| At the regular Government press conference in December 2024, Deputy Minister of Planning and Investment Nguyen Duc Tam said that Vietnam's initial growth target was 6.5%, but due to the impact of storms and floods, particularly Typhoon Yagi, the growth rate was revised down by 0.8%. However, with strong leadership from the Government and the Prime Minister, Vietnam's GDP surged by 7.09%, exceeding the target. This achievement provides a solid foundation for meeting all goals set for 2025. |
In 2024, Vietnam's trade surplus to the US soared 25.6% to US$104.6 billion, to the EU jumped 23.2% to US$35.4 billion, and to Japan skyrocketed 91.9% to US$3.2 billion. Meanwhile, Vietnam incurred a trade deficit of US$83.7 billion with China, up 69.5% year on year; US$30.7 billion with South Korea, up 5.9%; and US$9.9 billion with ASEAN, up 18.9%.
Disbursed FDI fund hit US$25.35 billion
As of December 31, 2024, total registered foreign direct investment (FDI) in Vietnam, including new projects, existing projects and equity purchases, reached US$38.23 billion.
Among the 80 countries and territories with newly licensed investment projects in Vietnam in 2024, Singapore was the largest investor with US$6.26 billion (accounting for 31.7% of all FDI funds), followed by South Korea with US$2.89 billion (14.6%), China with US$2.84 billion (14.4%) and Hong Kong (China) with US$2.17 billion (11.0%).
Notably, disbursed FDI funding in Vietnam was estimated at US$25.35 billion in 2024, a 9.4% increase from the previous year. Of the sum, the processing and manufacturing sector accounted for US$20.62 billion (accounting for 81.4% of the total), the real estate sector with US$1.84 billion (7.2%), and electricity, gas, hot water, steam and air-conditioning production and distribution sector with US$1.07 billion (4.2%).
International arrivals to Vietnam reach nearly 17.6 million
According to the GSO, favorable visa policies, tourism promotion efforts, advertising programs and prestigious international tourism awards contributed to a significant increase in international visitors to Vietnam in 2024.
In 2024, international arrivals to Vietnam increased by 39.5% year on year, reaching nearly 17.6 million, which is 97.6% of the total in 2019, the year before the COVID-19 pandemic. Of the sum, airborne arrivals exceeded 14.8 million, accounting for 84.4% of the total and rising 35.6% year on year. Arrivals by road approximated 2.5 million, accounting for 14.2% and advancing 63.3% year on year. Arrivals by sea reached nearly 248,100, accounting for 1.4% of the total and rising by 96.7%.
According to GSO Director General Nguyen Thi Huong, the positive results of 2024 laid an important premise for 2025 when the economy will accelerate to reach the highest possible targets in the 5-year Socioeconomic Development Plan for the 2021-2025 period. To complete this important task, according to the GSO, central agencies and localities need to proactively and flexibly manage monetary policies, stabilize exchange rates and interest rates, control prices and markets, ensure major economic balances, boost public investment disbursement, quickly and effectively deploy large-scale investment projects, and draw more high-quality FDI funds.
In addition, it is necessary to expand consumption, focusing on developing the domestic market; strengthen business support solutions; promote new growth drivers; encourage the green economy, circular economy, e-commerce, and new business models; intensify disease prevention; and proactively develop natural disaster prevention plans.
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Mr. Pyon Young Hwan, Director of Global Trading Center at Shinhan Bank Vietnam Vietnam's 7.09% GDP growth in 2024 was an impressive achievement, particularly amid global economic uncertainties. This growth was relatively high in Southeast Asia (an expected average growth of 4.5-5%), beating its own target of 6.5% and surpassing other countries such as Thailand (2.7%) and Singapore (4%). This growth reflected Vietnam’s economic strength, gained by the strong recovery of processing, manufacturing and export. Compared to other countries in the region, Vietnam is currently among the best GDP advancers. In 2025, the economic growth is likely to be impacted by three factors below: - US President Donald Trump's tariff policy: The US is currently Vietnam's largest export market. Given the large trade surplus with the US, the application of general tariffs may disadvantage the Vietnamese economy and weaken its exports. However, if the US-China trade war heats up, Vietnam may gain advantages from China's indirect exports. However, caution is needed as the US could impose strong sanctions on this indirect export activity. - Exchange rate: Due to the trade surplus to Vietnam, the US may accuse Vietnam of being a currency manipulator and apply trade sanctions. In order to promote exports and reduce the US trade deficit, Mr. Donald Trump expressed a desire to devalue the US dollar, which could lead to a softening of the USD/VND exchange rate. When the exchange rate eases, Vietnam’s exports may weaken since the pricing competitiveness of its products diminishes. - Ending of the Russia-Ukraine conflict: After President Trump takes office, the Russia-Ukraine conflict may come to an end. If this is the case, Russia and Ukraine will require substantial funding for post-war reconstruction. In this case, Vietnam could indirectly participate in the rebuilding efforts. To promote growth, Vietnam can focus on tourism and service sectors which are important contributors to Vietnam's GDP. Therefore, it is necessary to further boost the Government’s current policies on promoting the tourism and service sectors. In addition, Vietnam needs to strengthen FDI attraction policies. Currently, many policies are in place to provide incentives for FDI capital flows into high-tech industries. Notably, after the end of the war, both Russia and Ukraine will need to focus resources on national rebuilding. At that time, they will call for assistance from many countries. Therefore, Vietnam needs to prepare a plan in advance to join this process by promoting merchandise exports to these two markets. |
