Economics | Vietnam’s Economic Snapshot

Vietnam’s gross domestic product (GDP) is expected to conclude at 69 billion US dollars for 2015, a 10% increase from the previous year. The country’s strong economic growth has mainly been driven by its high exports and influx FDI inflows. Although recent banking turmoil and the failure of several large businesses have resulted in a slight economic slowdown, the country’s overall economy has been growing on an average of 7% CAGR since 2010. 

Agriculture accounts for 17.4% and employs 48% the workforce. The country’s key agricultural exports include coffee, cashew, pepper and rubber. Currently, Vietnam is the world’s second-largest exporter of both Robusta coffee and rice. In 2016, it coffee exports are expected to jump by 30%.

Manufacturing accounts for 38.8% of GDP and employs 21% of the workforce. Vietnam’s relatively low-cost labor and large domestic market has attracted the interest of many multinationals firm. Nike, for example, accounts for roughly 9% of Vietnam’s manufactured exports. Several large mobile phone producers, like Samsung, haveopened factories in Vietnam. Moreover, Vietnamese manufacturers have also skillfully integrated themselves into the supply chains of Chinese firms that have relocated or are relocating to Vietnam due to China’s rising wages. The industries that stood to benefit from such location shift are textiles and low-end assembly operations. During 2015, manufacturing output has rose by 6.4%. Services represent 43.7% of Vietnam’s GDP. Retailing and financial services are the main drivers of this sector. Vietnam’s total tourist receipts rose by 6.2% in 2015 and expected to increase by 4.4% in 2016. Chinese tourists account for largest portion of the country’s international tourist arrivals.

Content Creative: Wisuta Jaengprajak, Analyst @ C asean | Reference: C asean analysis based on data from IMF World Economic Outlook; Euromonitor International; and CIA World Factbook