IMF: Vietnam's per capita GDP will exceed that of Indonesia in 2026

Samsung's factory in northern Vietnam (2024)

The IMF forecasts that Vietnam's nominal GDP per capita in 2026 will reach 5,259 US dollars, a year-on-year increase of 8.9%. With the continuous agglomeration of high-tech industries such as electronic components and semiconductors, Vietnam is attracting the attention of foreign capital as an alternative manufacturing base to China...

Vietnam's per capita gross domestic product (GDP) is expected to surpass that of Indonesia in 2026. With the continuous gathering of high-tech industries including electronic components and semiconductors, Vietnam is drawing attention from foreign investors as a manufacturing base alternative to China.

According to the forecast of the International Monetary Fund (IMF), Vietnam's nominal GDP per capita will hit 5,259 US dollars in 2026, growing 8.9% year on year, surpassing Indonesia's 5,153 US dollars. The figure has nearly doubled over the past 10 years.

Vietnam's per capita GDP ranks fifth among ASEAN countries, only behind Thailand.

Vietnam has set a target of achieving economic growth of over 10% in 2026. Its real GDP in the July-September period rose 9.95% year on year. MA Fujita, a senior researcher at the Institute of Developing Economies, stated that "the government's proactive public investment is underpinning economic growth".

Vietnam's public investment in the January-September period increased 46% year on year. The full-year planned investment is about 1,000 trillion Vietnamese dong (equivalent to about 258 billion yuan). The construction of roads and airports will be promoted across the country.

Foreign direct investment (FDI) in the January-September period increased 12% year on year to 21.1 billion US dollars. Taiwan's Hon Hai Precision Industry and other enterprises are expanding production in northern Vietnam. The registered amount, a leading indicator of investment trends, surged 76% to 50.3 billion US dollars.

Vietnam's exports also posted strong performance. Its export volume in the January-September period rose 25% year on year to 434.3 billion US dollars. Enterprises such as South Korea's Samsung Electronics have bases in Vietnam to export electronic products and smartphones.

Statistics from the United States show that the US goods trade deficit with Vietnam reached 160 billion US dollars in the January-August period, surpassing that of China and Mexico and ranking first among all countries and regions.

Indonesia's economic growth rate is only about 5%. Although it has attracted foreign direct investment through industries such as battery electric vehicles (EVs), it has not fully driven employment and income growth. In addition, the depreciation of the Indonesian rupiah has also curbed the growth rate of nominal GDP denominated in US dollars.

Vietnam plans to raise its per capita GDP to 8,500 US dollars by 2030, reaching the same level as Thailand's current level. Due to factors such as heavy household debt, Thailand's real economic growth rate is only about 2% per year.

There are also cautious views on whether Vietnam can achieve its government's goals. Both the IMF and the Asian Development Bank (ADB) forecast that the economic growth rate in 2027 will be around 7.5%. Fujita pointed out that "not only infrastructure investment to boost short-term growth is needed, but also measures conducive to long-term growth such as talent cultivation and technology development".

This article is from the WeChat Official Account "Nikkei Chinese" (ID: rijingzhongwenwang), the author is YUJI Nitta, and it is published by 36Kr with authorization.