Economy of Vietnam: Q3/24 update

Now that Q3 of 2024 is behind us, the Vietnamese news is full with important numbers relating to the economy of Vietnam. In this VNHL news post, we are going to look at some of those numbers. In order of appearance: we are first going to look at Vietnam’s key economic indicators. Then we will look at: gross domestic product (GDP), and foreign investment. We will finish with international trade, and some predictions for the future.

Key indicators of the economy of Vietnam

According to the General Statistics Office of Vietnam (GSO), in the first nine months of 2024 nearly 121,900 new enterprises were established. This brings the total registered capital of all registered businesses to ~ VND 1.158 quadrillion, which is around USD 46.7 billion. Compared with last year: this is an increase of 3.4% in both the number of businesses and their registered capital. The GSO notices a steady growth trajectory amidst ongoing economic challenges. They also published the following growth rate of some key economic indicators. These numbers belong to September 2024, and they are in comparison with the same month last year:

• Index of industrial production: 10.8%
• International visitors to Vietnam: 20.9%
• Retail sales of goods and services: 7.6%
• Realized investment capital from the State budget: 1.1%
• Consumer price index (CPI): 2.63%
• Core inflation: 2.54%

Gross domestic product (GDP)

The world – leading bank Standard Chartered came with a forecast revision for Vietnam’s 2024 GDP. Now they forecast a growth of 6.8%, whereas they previously forecast only 6.0%. This change reflects a stronger-than-expected expansion in the third quarter of this year. In a report released on October 18 2024, the bank’s economists said the country’s economic growth momentum was relatively strong, with improvement across multiple sectors. These sectors include: imports and exports, retail sales, real estate, tourism, construction, and manufacturing. Trade recovery and increased business activities and foreign investment will be the main boosters for 2025 and beyond, they added.

Foreign direct investment (FDI)

The Foreign Investment Agency (FIA) of Vietnam under the Ministry of Planning and Investment came with further positive news. They said that in the first nine months of this year, the total registered FDI capital reached more than USD 24.78 billion. This is an increase of 11.6% compared with the same period in 2023. Furthermore, it is expected that Vietnam will attract a total number of USD 39-40 billion of FDI over the whole year 2024. For example: in September alone, Bac Ninh, Binh Duong, and Dong Nai provinces conducted investment promotion activities. Many projects received new and expanded investment certificates. This is one of the factors why total registered investment capital reached the highest level since the beginning of the year.

International trade

Viet Nam News reports that two – way trade between Vietnam and the US amounted to USD 100.3 billion after the first 9 months of 2024. The US is the largest export market for Vietnamese goods. Vietnam’s export value reached USD 89.4 billion by the end of September. This is an increase of 27.4% compared with the first nine months of 2023, and it accounts for 29.8% of Vietnam’s total exports. The US is also one of Vietnam’s largest import partners. The import turnover reached USD 10.9 billion in the January-September period, up 6.2% compared with last year. Meanwhile, trade with the European Union also looks promising. According to an article in Viet Nam News, after three years of the EU – Vietnam Free Trade Agreement (EVFTA), trade has increased. Export growth to the EU averaged 8.1% from 2021 to 2023. And Vietnamese businesses are successfully venturing into e-commerce with the EU.

The economy of Vietnam: looking ahead

It is fair to say that the first 9 months of 2024 looked quite good for the economy of Vietnam. And based on predictions both from Vietnam’s Foreign Investment Agency and leading international banks, the future also look promising. German international broadcaster Deutsche Welle (DW) also picked up on these positive developments. They recently reported on this topic, writing that Vietnam’s GDP predictions for this year and next year are higher than what was earlier predicted. They noted that the increase in growth attributed to a rebound in manufacturing exports, tourism, and investment. Comparing Vietnam with some of its regional peers, they concluded that Vietnam could have larger growth in 2025 than other emerging economies such as Thailand, Cambodia, Malaysia, Indonesia and the Philippines.

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