Vietnam Ends 2024 Strong 

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Vietnam capped 2024 with a better-than-expected annual GDP growth of 7.09%, beating the government’s target of 6.5%.  

This brings the country into 2025 with confidence, even amid global uncertainty driven by war, the return of Donald Trump to the U.S. presidency, and other challenges. Before getting too far into January, it’s worth looking back on the past 12 months for Vietnam across socioeconomic and political events. 

Political uncertainty followed by calm  

The first half of 2024 saw President Vo Van Thuong and National Assembly Chairman Vuong Dinh Hue resign as part of the ongoing ‘blazing furnace’ anti-corruption campaign. This continued a two-year stretch of unprecedented turnover among top leadership.  

Then, in July, General Secretary Nguyen Phu Trong died at the age of 80 following a period of illness.  

He has since been succeeded by To Lam, the former Minister of Public Security, while Luong Cuong was elected President by the National Assembly.  

This leadership configuration, along with Prime Minister Pham Minh Chinh and new National Assembly Chairman Tran Thanh Man, has remained stable, providing much-needed calm after a turbulent period. 

Economic Recovery 

Quarterly GDP growth increased through each quarter of the year, hitting 7.55% in Q4 and ultimately driving the fourth-highest annual expansion in the last 15 years.  

Export-import turnover reached a new record, with the critical export sector hitting nearly US$385 billion in value, a 14.4% year-on-year increase. Registered FDI, meanwhile, was a healthy US$31.4 billion, with the government placing intense focus on the semiconductor and Artificial Intelligence industries.  

Competition in those sectors is fierce globally and especially in Southeast Asia, with Malaysia, Indonesia, and Thailand all securing major investment deals from the likes of Google and Apple. Vietnam remains a strong contender, as highlighted by Nvidia’s much-celebrated December announcement that it will invest in R&D in the country.  

Infrastructure and Energy 

Last year also saw several landmark developments in the infrastructure and energy sectors, both in terms of approvals for future projects and completion of key systems. 

The National Assembly approved the long-discussed North-South high-speed railway, expected to cost an astonishing US$67 billion while linking Hanoi and Ho Chi Minh City across 1,500 kilometers of track. 

With an estimated travel time of five hours, this would dramatically reshape domestic travel while linking a total of 20 provinces and cities. The construction timeline is incredibly ambitious, with work expected to begin in 2027 and trains running in 2035. That may be unlikely given the complexity of the project, but this is laudable nonetheless. 

Parliament also approved the resumption of nuclear energy development in Ninh Thuan Province after this plan was shelved over cost concerns in 2016. At the time, two nuclear plants were to be built with support from Russia and Japan, respectively. 

It’s not currently clear who will provide support for the new plan, or what type of reactors may be used, but Vietnam’s energy demand is growing at 13% annually while the government strives to meet its net-zero emissions commitment by 2050. 

In terms of public transit, Hanoi opened the above-ground section of its second metro line, while Ho Chi Minh City finally completed its first line after 12 years of construction, drawing enormous crowds while spurring hope that the city can move more quickly on further lines. 

Briefly stepping away from the country focus, Vietnam Holding also enjoyed a strong 2024. It was named ‘Best Emerging Markets Trust’ by UK Investor Magazine while also winning awards from Citywire and Investment Week, putting it in a strong position for 2025.   

The Year Ahead 

Similarly, Vietnam has moved into 2025 with a full head of steam.  

The government, led by General Secretary To Lam, is pushing forward with a dramatic streamlining of the lumbering state bureaucracy to modernize governance and improve efficiency.  

If all goes to plan, within 2025, multiple ministries and state agencies will merge, while those unaffected by mergers are expected to reduce the number of internal divisions by up to 20%. All told, up to 20,000 civil servants could be made redundant at a cost of around US$5 billion. 

This will be a difficult process, but it will address longstanding concerns over slow approval processes, overlapping legal responsibilities, and confusing regulations.  

Several significant challenges stand in the way as well. Energy supply remains a concern, while northern Vietnam – and especially Hanoi – currently faces a severe air pollution crisis that will require sustained action to address.  

As mentioned earlier, Trump’s return to power in the U.S., Vietnam’s largest export market, comes with the potential threat of trade tariffs. The president-elect has not specifically targeted Vietnam with his recent rhetoric, but the Southeast Asia country has the third-largest trade surplus with the U.S. after China and Mexico. 

As a result, this is something that bears close watching in the coming weeks and months. 

More long-term, officials are sounding the alarm about falling birth rates that threaten to impact Vietnam’s working-age demographics eventually. 

All of that being said, Vietnam’s fundamentals remain sound, and there is a clear sense of optimism following two underwhelming post-pandemic years. Risks aside, the country should certainly be able to reach the goal of 8% growth, and perhaps even higher moving forward. 

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