Although its GDP is only 1/2 and its GDP per capita is 1/3 that of Thailand, it is estimated that Vietnam could 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 manager of BW Industrial Development JSC, the Vietnamese economy Thailand, Indonesia and the Philippines in the coming years.
In terms of the size of the economy, Thailand will be the second largest economy in Southeast Asia after Indonesia by 2021, and ranked 25th in the world. According to the World Bank (WB), Thailand’s economy has grown by 1.6%, with a GDP of USD 546 billion.
GDP of Vietnam and Thailand in the period 2010-2020 (USD billion). Source: WB.
Meanwhile, Vietnam will achieve growth of 2.58% in 2021 with a GDP of $352 billion. In the bloc of countries in Southeast Asia, Vietnam is currently in 5th place, after Indonesia, Thailand, the Philippines and Singapore.
In the period 2018-2021, Thailand’s GDP (about USD 530 billion/year) will be double that of Vietnam (about USD 282 billion/year). Thailand’s economy currently relies heavily on tourism and exports, with exports accounting for about 60% of GDP. The Vietnamese economy is heavily dependent on agriculture, commodity exports and foreign direct investment.
GDP per capita of Vietnam and Thailand in the period 2010-2020 (USD). Source: WB.In terms of GDP per capita, Thailand’s GDP has always been greater than Vietnam’s for years. 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, Vietnam’s average GDP will reach about USD 2,859 and Thailand will reach about USD 7,645. In 2021 alone, Thailand’s average GDP will be about 2.7 times that of Vietnam.
Although the GDP is only 1/2 and the average GDP is 1/3, Vietnam is rated as a rising star and could 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 Manager of BW Industrial Development JSC confirmed: “Whether there is Covid -19 or not, Vietnam is still in a favorable position to welcome the wave of China+1.” According to him, Vietnam’s economy will surpass Thailand, Indonesia and the Philippines in the coming years.
In terms of economic growth, according to Bangkok Post, the Thai economy has always grown at an average of 7.5% in the 1960s-1990s. But in the period 2008-2018, the growth rate dropped sharply, in 2009 even to minus 0.7%.
Meanwhile, the Vietnamese economy is more stable with an overall growth of 5.2%-7.1% in the period 2012-2018. Vietnam has maintained a stable growth rate of 7% and is considered one of the successful economies of the 21st century.
In particular, the Bangkok Post highlighted that Vietnam’s GDP growth rate in 2018 was 1.7 times higher than Thailand’s. Other indicators, such as attracting foreign direct investment, exports of goods and services and consumer spending, have also outpaced Thailand.
Not only that, in terms of high-tech exports, Vietnam achieved a total turnover of USD 55.2 billion in 2016, while Thailand reached only USD 8.8 billion. In addition, according to the Bangkok Post, even decades later, the Vietnamese economy is still able to compete and outperform Thailand.
According to BW Industrial, one of the driving forces behind Vietnam’s economy to soon surpass Thailand’s is its gold population. According to the World Bank, the population of Vietnam is expected to reach 120 million people by 2050. Where 70% of the population is under the age of 35 and the average life expectancy is 76 years, the highest of countries with comparable income levels in Asia.
Meanwhile, Thailand’s population size is currently 70 million people and more than a quarter of the population will be over 60 years old by 2030. According to a United Nations report, the birth rate in Thailand, in particular, has continued to fall sharply in recent years. According to the International Monetary Fund (IMF), the workforce will slow Thailand’s economic growth over the next two decades.
Moreover, BW Industrial said that free trade agreements (FTAs) have also become one of the factors helping Vietnam to develop more and more. Currently, the number of free trade agreements in which Vietnam participates is greater than in 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),…
In addition, Vietnam is the first country in Southeast Asia to sign a bilateral trade agreement with the EU market. The Free Trade Agreement between Vietnam and the European Union (EVFTA) has significantly boosted the Vietnamese economy, since then the Vietnamese economy has started to gain an advantage over Thailand.
According to the Ministry of Planning and Investment, after the entry into force of the EVFTA, Vietnam’s exports to Europe are expected to grow by 42.7% in 2025 and 44.37% in 2030 compared to when there was no agreement.
Another factor that gives the Vietnamese economy a development advantage over Thailand is the strong increase in domestic consumption, BW Industrial emphasized. Accordingly, as economic conditions improved, Vietnam’s GDP per capita tripled over the period 2005-2021 (from $600 to $2,859). When income rises, purchasing power also increases.
In addition, 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 ranks 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 the conditions for a surge in national consumer spending. As a result, the spending of this group of people will contribute to economic growth.
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