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Vietnam is diversifying the growth model
Since Đổi Mới in 1986, Vietnam has achieved extraordinary progress—transforming from a low-income to an upper-middle-income country by opening its economy, attracting strong FDI inflows, and fueling an export-driven cycle of job creation and rising consumption.
Today, however, exports account for nearly 95% of Vietnam’s GDP. This heavy reliance suggests it may be time for Vietnam to diversify its growth engines—especially in a world where global trade uncertainty is rising.
What is the diversification opportunity?
A closer look at daily life and Vietnam’s economic structure points to a clear challenge: underinvestment in infrastructure.
Currently, Vietnam’s gross capital formation is just 31.7% of GDP—comparable to China in 1999—highlighting considerable room for expansion. Recognizing this, the government is fast-tracking major projects in roads, ports, and logistics to tackle one of the biggest obstacles to sustainable growth: high logistics costs, which today account for about 17% of GDP, much higher than regional peers.
Lowering logistics costs will boost business profitability, stimulate domestic consumption, and build a stronger, more resilient economy for the long term.
