Although GDP is only 1/2 and GDP per capita is 1/3 of that of Thailand, Vietnam is being assessed as can surpass this country in the near future.
At the conference to discuss strategies to optimize investment opportunities in Vietnam after the pandemic with the theme “Vietnam – a rising star”, according to Mr. CK Tong, General Director of BW Industrial Development JSC, Vietnam’s economy will surpass Thailand, Indonesia, and the Philippines in the coming years.
In terms of economy size, in 2021, Thailand will be the second-largest economy in Southeast Asia, after Indonesia and ranked 25th in the world. According to the World Bank (WB), Thailand’s economy has grown by 1.6% with GDP reaching 546 billion USD.
GDP of Vietnam and Thailand in the period 2010-2020 (billion USD). Source: WB.
Meanwhile, Vietnam will achieve 2.58% growth in 2021 with a GDP of $352 billion. In the bloc of countries in Southeast Asia, Vietnam is currently ranked 5th, after Indonesia, Thailand, the Philippines and Singapore.
In the period 2018-2021, Thailand’s GDP (about 530 billion USD/year) is double that of Vietnam (about 282 billion USD/year). Thailand’s economy is currently heavily dependent on tourism and exports, with exports accounting for about 60% of GDP. Vietnam’s economy is heavily dependent on agriculture, raw exports and foreign direct investment.
In terms of GDP per capita, for many years, Thailand’s GDP has always been larger than that of Vietnam. Specifically, in the period 2018-2021, Thailand’s average GDP (7,800 USD/year) is about 3 times that of Vietnam (2,740 USD/year).
In 2021, the average GDP of Vietnam will reach about 2,859 USD and Thailand will reach about 7,645 USD. In 2021 alone, Thailand’s average GDP is about 2.7 times that of Vietnam.
Although GDP is only 1/2 and the average GDP is 1/3, Vietnam is being evaluated as a rising star and may surpass Thailand in the near future.
Specifically, at the Conference to discuss strategies to optimize investment opportunities in Vietnam after the pandemic with the theme “Vietnam – a rising star”, Mr. CK Tong, General Director of BW Industrial Development JSC once affirmed: “Whether there is Covid-19 or not, Vietnam still holds a favorable position to welcome the wave of China+1”. According to him, Vietnam’s economy will surpass that of Thailand, Indonesia and the Philippines in the coming years.
In terms of economic growth rate, according to Bangkok Post, the Thai economy in the years 1960-1990 always grew at an average rate of 7.5%. But during the period 2008-2018, the growth rate dropped sharply, even falling to minus 0.7% in 2009.
Meanwhile, Vietnam’s economy is more stable with a total growth rate of 5.2%-7.1% in the period 2012-2018. Vietnam has maintained a stable growth rate of 7% and is considered as one of the successful economies of the 21st century.
In particular, the Bangkok Post emphasized that Vietnam’s GDP growth rate in 2018 was 1.7 times higher than that of Thailand. Other indicators such as FDI attraction, exports of goods and services and consumer spending have also surpassed Thailand.
Not only that, in terms of high-tech exports, in 2016, Vietnam achieved a total turnover of 55.2 billion USD, while Thailand only reached 8.8 billion USD. Thereby, Bangkok Post said, even after decades, Vietnam’s economy is still capable of competing and surpassing Thailand.
According to BW Industrial, one of the driving forces for Vietnam’s economy to soon surpass Thailand’s is the golden population. According to the World Bank, Vietnam’s population is expected to reach 120 million people by 2050. In which, 70% of the population is under the age of 35 and the average life expectancy is 76 years, the highest among countries with similar income levels in Asia.
Meanwhile, the population size of Thailand is currently 70 million people with more than a quarter of the population will be over 60 years old by 2030. In particular, according to a United Nations report, Thailand’s birth rate is continuously declined sharply in recent years. According to the International Monetary Fund (IMF), the labor force will slow down Thailand’s economic growth over the next two decades.
In addition, BW Industrial said that free trade agreements (FTAs) have also become one of the factors that help Vietnam develop more and more. Currently, the number of FTAs that Vietnam participates in is more than Thailand and other countries in the region.
In particular, the major agreements that Vietnam has signed, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Regional Comprehensive Economic Partnership (RCEP),…
Along with that, Vietnam is the first country in Southeast Asia to sign a bilateral trade agreement with the EU market. The Vietnam – European Union Free Trade Agreement (EVFTA) has significantly boosted Vietnam’s economy, since then, Vietnam’s economy has started to have an advantage over Thailand.
According to the Ministry of Planning and Investment, Vietnam’s exports to Europe after the EVFTA comes into effect are expected to grow by 42.7% in 2025 and 44.37% in 2030 compared to when there was no agreement.
Another factor that helps Vietnam’s economy have a development advantage over Thailand is the sharp increase in domestic consumption, BW Industrial emphasized. Accordingly, when economic conditions improved, Vietnam’s GDP per capita tripled in the period 2005-2021 (from $600 to $2,859). When income increases, purchasing power also increases.
Besides, according to the World Bank, Vietnam’s middle class currently accounts for 13% of the country’s population and is expected to increase to 26% by 2026. Vietnam is among the top 5 countries in the region, including Thailand, Malaysia, Indonesia and the Philippines on the rise of the middle class.
According to the National Center for Socio-Economic Information and Forecasts (NCIF), a boom in middle-class spending will create conditions to spur an increase in national consumption spending. Thereby, the spending of this group of people will contribute to economic growth.