50 years since the liberation of the South and national reunification (April 30, 1975 – 2025), Vietnam’s economy has undergone remarkable changes. Its gross domestic product (GDP) per capita skyrocketed from only 232 VND (equivalent to about 80 USD) in 1975 to 4,700 USD in 2024. The GDP soared from 8 billion USD in 1986 to 476.3 billion USD in 2024, or about 59.5 times higher. These indicators reflect the economic development journey that has been making great differences to the country, paving the way for it to enter a new era – the era of the nation’s rise.
Positive changes
Vietnam’s Doi Moi (Renewal) process started in 1986, but it was not until the 1991-1995 period that the market mechanism with State management through laws, plans, policies, and other tools began to generate positive results.
The country has gradually emerged from stagnation and recession. The economy has achieved significant results, including a relatively high and sustained growth rate. Most primary targets have been exceeded, with an average GDP growth of 8.2% per year across all economic sectors, which have all experienced relatively strong growth rates.
The average GDP from 1996 to 2000 reached 7% per year. In the 2001-2005 period, the renewal process went into depth and achieved certain results, including a GDP of 7.5% per year, particularly 8.4% in 2005. In the 2006-2010 period, Vietnam transformed from a low-income country to a lower-middle-income country with a growth rate of 7.26% per year.
From 2011 to 2020, Vietnam posted an average growth of nearly 6% per year, and an economic size of 271.2 billion USD (or 343.6 billion as re-evalued by the General Statistics Office in 2020).
The average income per capita in 2020 was 2,779 USD (or 3,521 USD as re-evalued by the General Statistics Office in 2020).
According to 2023 data from the International Monetary Fund (IMF), Vietnam’s economy was valued at about 433.3 billion USD, 5th in Southeast Asia and 35th globally.
In the context of facing many difficulties and challenges, Vietnam’s economy achieved a GDP growth rate of over 5% in 2023 with many positive signals from the export and foreign direct investment sectors. (Photo: VNA)
In 2024, the economy reached 476.3 billion USD with a GDP growth rate of about 7.09%. Reputable international organisations continue to deliver positive assessments of Vietnam’s economy. The IMF forecasts that Vietnam’s GDP will reach 506 billion USD in 2025, ranking 33rd globally.
Foreign investment, important milestones
Over the nearly 40 years of attracting foreign investment, the years from 1988 to 2000 were the beginning phase. In 1988, the first license for a foreign direct investment (FDI) project in Vietnam was granted to a project in the southern province of Ba Ria – Vung Tau. Starting in 1991, foreign direct investment (FDI) in Vietnam began to grow rapidly, marking the first wave of investment in the country. The number of projects and the amount of registered capital consistently set new records. Between 1991 and 2000, Vietnam received 45.49 billion USD in registered FDI capital, with 20.67 billion USD realised.
During this period, Vietnam’s GDP increased by an average of 7.56% per year, of which the GDP in 2000 was 2.07 times higher than in 1990.
Between 2001 and 2010, total registered foreign direct investment (FDI) capital in Vietnam reached 168.88 billion USD, while realized capital amounted to 58.48 billion USD. These figures represent an increase of 3.32 times and 2.85 times, respectively, compared to the 1991–2000 period. The foreign investment sector played a crucial role in transforming Vietnam’s growth model from one based on breadth to one focused on depth.
Significantly, in 2006, Vietnam saw its first billion-dollar projects from major foreign companies, including Intel, a US-based chip manufacturer, and Posco, a steel group from the Republic of Korea. This marked the beginning of the second wave of investment in the country. In 2008, registered FDI capital continued to rise, setting a record at nearly 72 billion USD. This year also marked the start of Samsung’s first factory construction in Vietnam, located in the northern province of Bac Ninh, establishing Samsung as the largest FDI investor in the country today.
In the 2011-2020 period, the total registered capital reached 270.69 billion USD, and the realised capital reached 152.3 billion USD, respectively 1.6 times and 2.6 times higher than the 2001-2010 period.
At the end of this period, in 2020, the FDI sector accounted for 20% of the GDP structure and about 55% of the total industrial production value, contributing significantly to the formation of several key industries such as oil and gas exploitation, electronics, chemicals, automobiles, motorbikes, information technology, telecommunications, steel, cement, agricultural and food processing, leather and footwear, textiles and garments.
FDI sector has made an important contribution to forming several key industries in Vietnam. (Illustrative photo: VNA)
However, in this third wave, FDI capital did not leap like in the 2005-2008 period, but increased steadily. Mergers and acquisitions (M&A) began in 2014 and gradually became a new investment trend.
In 2020, the COVID-19 pandemic caused an unavoidable “slump” in the global economy, but fortunately, the Vietnamese economy in general and FDI inflows into Vietnam in particular did not fall into recession. In the 2021-2023 period, the total registered FDI capital reached 94.98 billion USD, the total realised capital reached 65.32 billion USD. FDI contributed 16.1% of the total social investment capital in 2023. Some large corporations, such as Apple, Dell, Foxconn, Pegatron, and Nike, shifted their supply chain production to Vietnam. Many large electronics and semiconductor corporations, such as Samsung, Synopsys, Qualcomm, Infineon, Amkor, and Nvidia, continue to expand cooperation-investment activities. But according to some experts, the fourth wave of investment has yet to come.
Expectations for new technology
Over the past four decades, FDI has contributed to socio-economic development and international economic integration. In 1995, the market share of domestic and foreign enterprises contributing to Vietnam’s exports was 73% and 27%, respectively. This ratio has now reversed, with the FDI sector accounting for more than 70%. In the early days, most investment capital was poured into the low-added-value and labour-intensive textile and footwear processing sector. But by the end of 2024, the proportion of capital invested in the processing and manufacturing industry reached nearly 50%.
Additionally, the Politburo’s Resolution 50-NQ/TW on the foreign investment cooperation strategy until 2030 has set many further goals. Vietnam aims to increase the proportion of investment capital from the US and attract more multinational corporations, among the 500 largest multinational corporations in the world, ranked by Fortune Magazine (the US).
Significant institutional breakthroughs are necessary to harness the fourth wave of investment development. One key breakthrough is the Politburo’s Resolution 57-NQ/TW, which outlines directions for science, technology, and innovation development. This resolution introduces preferential policies related to taxes, financial support, and administrative reforms, aimed at streamlining investment and licensing procedures. As a result, Vietnam becomes more attractive to FDI corporations operating in sectors such as semiconductors, digital technology, and artificial intelligence applications.
Professor Dr. Nguyen Mai, former Chairman of the Vietnam’s Association of Foreign Invested Enterprises
By encouraging businesses and research institutions to invest more in research and development, this resolution aims to enhance the quality of production technology and promote the application of new technologies. It also fosters international collaboration in science and technology, helping to connect Vietnam with global resources, technologies, and markets. To support this sector, it is essential to complete the legal framework, establish a monitoring system, and regularly assess the effectiveness of capital use in science and technology.
(Photo: VNA)
Dr. Phan Huu Thang, former Director of the Foreign Investment Department under the Ministry of Planning and Investment, now the Ministry of Finance, noted the importance of technology transfer and strengthened linkages between the FDI sector and domestic enterprises. Technology transfer between Vietnamese and international FDI enterprises will not happen if the domestic support industry does not develop rapidly enough to provide high-tech human resource training.
Currently, the market has recorded positive signals. In the first two months of 2025, registered FDI capital in Vietnam reached more than 6.9 billion USD, while disbursed capital was 2.95 billion USD, up 35.5% and 5.4% respectively over the same period last year. In its latest update report, Savills Vietnam – a real estate consulting and management company headquartered in the UK- emphasised that Vietnam is becoming a strategic destination for technology giants thanks to its favourable geographical location in the global supply chain. This is evidenced by the presence of corporations like Intel, Amkor, Nvidia, Infineon, Marvell, and Hana Micron – the world’s leading names in the semiconductor industry.
(Photo: VNA)
For 2025, direct investment capital and FDI capital flows into the Vietnamese stock market will provide strong returns.
Michael Kokalari, Director of Macroeconomic Analysis and Market Research at VinaCapital
Enhancing Vietnam’s higher education system, particularly in science, technology, engineering, and mathematics (STEM), is crucial for realising the country’s potential in high-tech industries. Additionally, simplifying administrative procedures is a vital step toward stimulating ongoing economic growth./.
