Vietnam's economic scale is about to surpass Singapore's, reaching upper middle income by 2025?

GDP will surpass Singapore by 2029

A report by the UK's independent Center for Economic Forecasting and Analysis CEBR shows that Vietnam's GDP in 2024 will reach 450 billion USD, up one place from the previous year, to 34th in the world and will surpass Singapore in 2029. At that time, Vietnam's GDP is forecast to reach 676 billion USD, while Singapore's is 656 billion USD.

According to CEBR, Vietnam's economy will grow rapidly in the future. In the next 5 years, the average growth rate is expected to reach 5.8%. In the period 2030-2039, the average GDP growth rate will be 5.6%/year.

By 2039, Vietnam's GDP will reach 1,410 billion USD, ranking 25th in the world, in Southeast Asia only behind Indonesia (ranked 10th) and the Philippines (22nd) and far surpassing Thailand (ranked 31st), Malaysia (34th) and Singapore (35th).

By the end of 2024, the size of global GDP is estimated to reach 110,000 billion USD. This size will double to 221,000 billion USD by 2039.

Has Vietnam joined the group of upper middle-income countries?

In July, according to data from the World Bank (WB), in 2023, Vietnam's gross domestic product (GDP) will reach nearly 430 billion USD and per capita income will reach nearly 4,347 USD/person.

According to the latest classification applicable for 2023-2024, Vietnam has not yet entered the group of upper-middle income countries.

According to the new classification, from July 1, 2023 to July 1, 2024, the average income per capita of countries is divided into 4 groups: Countries with an average income below 1,135 USD are in the low-income group, countries with an average income between 1,136-4,465 USD are in the lower-middle-income group, countries with an average income between 4,466-13,845 USD are in the upper-middle-income group. And countries with an average income above 13,845 USD are in the high-income group.

According to CEBR, Vietnam's GDP per capita in 2024 will reach 4,469 USD. Thus, according to the above classification, Vietnam could have entered the group of upper-middle-income countries.

Also according to CEBR, in 2025, Vietnam's GDP per capita will reach 4,783 USD (ranked 124th in the world) and 2029 will be 6,463 USD (ranked 117th) and by 2039 will be 12,727 USD (ranked 100th in the world).

However, according to CEBR, Vietnam's GDP per capita in purchasing power parity (PPP) in 2024 reached 16,193 USD and was classified as a lower middle-income country.

In terms of GDP per capita, Vietnam still ranks quite low compared to the region. Vietnam's GDP per capita in 2023 ranked 6th in Southeast Asia, after Singapore, Brunei, Malaysia, Thailand, and Indonesia. In 2024, the ranking will not change.

According to the International Monetary Fund (IMF) forecast, by 2026, Vietnam will rise to 4th place in the ASEAN-6 group in terms of GDP per capita, reaching 6,140 USD/person, behind Singapore, Malaysia, Thailand and surpassing Indonesia and the Philippines.

Technology can help Vietnam develop faster

Previously, some calculations showed that it would take Vietnam more than 10 years to catch up with Thailand in terms of GDP per capita, nearly 20 years to catch up with Malaysia, and 50 years to surpass Singapore. However, all of these calculations were based on many assumptions. In reality, there are many variables.

However, there may also be cases where Vietnam breaks out at a faster pace.

Currently, Vietnam is one of the countries that has maintained a very fast growth rate after the pandemic. Vietnam has a very open economy with many bilateral and multilateral trade agreements and is a destination for FDI capital flows, as well as an important link in the global supply chain. Vietnam is a comprehensive strategic partner with many major economies such as China, Russia, the US, Japan, etc.

In 2024, Vietnam recorded many positive signals, including the phenomenon of billion-dollar "eagles" flocking to Vietnam with investment plans. In 2024, FDI capital flows continued to pour strongly into Vietnam, possibly reaching 40 billion USD, ranking in the top 15 developing countries attracting the largest FDI in the world.

Many of the world's leading corporations, especially in the technology sector, have "landed" in Vietnam. That was the return of billionaire Jensen Huang in early December, along with the decision of the world's largest chip corporation Nvidia to choose Vietnam to build the third artificial intelligence (AI) research center in the world, after the US and Taiwan (China), or Google also chose Vietnam as a place to expand its strategy...

In November, Apple supplier Foxconn announced an $80 million investment in chip manufacturing in Bac Giang province, while billionaire Mark Zuckerberg’s Meta plans to expand its production of virtual reality devices. Billionaire Elon Musk’s SpaceX also revealed its intention to invest $1.5 billion in Vietnam, while the Trump Organization will invest a similar amount in Hung Yen.

The breakthrough trend thanks to technology is expected to help Vietnam quickly achieve a high ranking in the world economy.