Strong Trade and FDI Drive Vietnam’s Economic Growth in Q1 2024

Vietnam's economy in the first quarter of 2024 demonstrated a resilient recovery, with a GDP growth of 5.66% compared to the same period in 2023. Although this growth rate is lower than the 6.7% recorded in the preceding quarter, and there were declines in the production of key industrial products such as smartphones (down 13.3%) and automobiles (down 11.3%), the quarter still witnessed strong trade performance and robust foreign direct investment inflows into Vietnam.

Strong trade performance was recordedin the first quarter, with two-way trade reaching US$178.04 billion, up 15.5% YoY. Exports totaled US$93.06 billion, a 17% increase, while imports were US$84.98 billion, up 13.9% YoY. This performance resulted in a trade surplus of US$8.08 billion for Vietnam. FDI sector remained a driving force behind Vietnam's export growth, contributing 72.9% of the total export value, and recorded a 13.9% increase from Q1 2023. The U.S. remained Vietnam's top export market, with exports of US$26.2 billion, resulting in a US$22.7 billion trade surplus for Vietnam. China continued as Vietnam's largest import market at US$29.4 billion in this first quarter.

Vietnam also continued to be a globally attractive destination for foreign investments. In the first quarter, Vietnam secured US$6.17 billion in FDI, a 13.4% increase compared to Q1 2023. The country saw a surge in newly registered projects, with 644 projects worth more than US$4.77 billion. The manufacturing and processing sector led in FDI attraction, followed by real estate and retail. New investments were focused on sectors including energy, solar cell production, photovoltaic cell manufacturing, silicon ingots, component manufacturing, and electronics products. Major cities with advantages in infrastructure, labor force, and administrative procedure reforms, such as Hanoi, Ho Chi Minh City, Hai Phong, Bac Ninh, and Quang Ninh, accounted for nearly 75% of new projects and 78% of total investment nationwide.
Among the 62 countries and territories investing in Vietnam in the first three months of 2024, Singapore led as the top source of FDI with more than US$2.55 billion, marking a 51.3% YoY increase and comprising 41.6% of the country's total FDI, while China led in terms of the number of newly registered projects, accounting for 27.8% of the total.

For 2024, the IMF has forecasted that Vietnam’s economy could potentially reach US$469.7 billion, with a 5.8% GDP growth. With a strong start in Q1, Vietnam is poised to maintain its position as the fifth-largest economy in Southeast Asia.