HANOI - Vietnam's economy experienced substantial growth in December 2024, with its gross domestic product (GDP) expanding by 7.09% for the year, surpassing the projected 6.5% increase. This marks a significant improvement from the 5.05% growth in 2023. The country's manufacturing sector played a crucial role in this performance amidst global challenges such as geopolitical tensions, climate disruptions, and shifting stakeholder expectations.
The fourth quarter of 2024 alone saw a GDP rise of 7.55%, the fastest in over two years, positioning Vietnam favorably against other regional economies. As external threats loom, including China's economic slowdown, potential trade conflicts spurred by US tariffs, and global interest rate and currency risks, Vietnam's government targets an 8.0% GDP growth in 2025, focusing on productivity enhancements.
Vietnam's strategic initiatives are anticipated to drive domestic consumption, bolstered by a record public investment of US$26.5 billion in 2024. The country's first metro line in Ho Chi Minh City reported over 1 million users shortly after its launch, reflecting significant infrastructure advancements.
Technological progress is also evident, with the implementation of new high-tech investment criteria and recognition of AI technology leaders. The potential investment of US$1.5 billion from Elon Musk's SpaceX for Starlink satellite internet services underscores Vietnam's growing digital economy and tech-savvy population. This investment is poised to further digitalize the country's banks and retailers and attract more foreign direct investment.
Vietnam's stock market mirrored the economic upswing, with infrastructure and corporate governance improvements, such as amendments to the Securities Law enhancing market transparency and oversight. The implementation of Circular 68/2024/TT-BTC, which allows foreign institutional investors to purchase shares under certain conditions without upfront payment, has raised optimism for 2025. With anticipated earnings per share growth of over 20%, the highest in ASEAN, the market is expected to maintain its positive trajectory.
VietNam Holding Limited (VNH), managed by Dynam Capital Limited, also reported a successful year, outperforming the index throughout 2024 and generating strong Alpha despite the 4.8% devaluation of the Vietnam Dong against the US dollar. The fund, which has been trading at a premium to net asset value, issued new shares to meet investor demand for the first time in over a decade. The information is based on a press release statement.
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