GDP growth rises to over two-year high in Q4

Growth exceeds both market and government expectations: The Vietnamese economy closed 2024 on a high note, as annual GDP growth sped up to 7.6% in the fourth quarter from 7.4% in the third quarter, marking the best result since Q3 2022. The upturn outpaced market expectations and brought overall economic growth in 2024 to 7.1% (2023: +5.1% yoy), surpassing the government’s target of 6.5%.

Services sector drives acceleration: The services sector—which accounted for 42% of full-year GDP in 2024—spearheaded the upturn, accelerating to 8.2% (Q3:+7.5% yoy), bolstered by tourism; yearly growth in tourist arrivals almost doubled from Q3 in Q4. Moreover, the agricultural sector grew 3.0% in Q4, inching up from the 2.9% expansion logged in Q3. That said, the industrial sector lost steam, edging down to 8.4% annually in Q4 (Q3: +9.0%), marking the worst result since Q1 2024: Weaker momentum in manufacturing activity and a sharper decline in mining output drove the deceleration.

GDP growth to cool: Our panelists expect GDP growth to gradually lose momentum from current levels in the coming quarters: The fading effect of front-loading sales ahead of U.S. tariff hikes and a high base of comparison will weigh on the result later in 2025. Accordingly, full-year economic growth is seen decelerating from 2024, hovering around the lower band of the government’s 6.5–7.0% target range. Growth in public spending, fixed investment and exports will soften, while stronger private consumption growth will provide tailwinds.

Panelist insight: Commenting on the reading, Suan Teck Kin and Peter Chia, analysts at United Overseas Bank, stated: “In view of the strong momentum carried over from 2024 while taking into account risks and potential downside from further trade frictions from the new US administration, we’re raising our forecast for Vietnam’s GDP growth in 2025. […] We expect positive momentum from domestic drivers such as production, consumer spending, and visitor arrivals to contribute to the activities especially in the first half. However, uncertainty on trade outlook will be a major risk for Vietnam in the second half, with its rising dependence on exports, which have grown to record high of more than USD400 bn in 2024, just about the size of Vietnam’s nominal GDP of USD450 bn.”

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