As Vietnam continues to thrive among Asia’s top destinations for foreign investment, we remain committed to keeping our global audience informed about key developments through the Kenno Vietnam Pulse series. December 2024 was a significant month for tech and infrastructure in Vietnam as the country signed a new AI partnership with NVIDIA, launched its highest-capacity submarine cable system, opened a major MRT line, and initiated government-led digital transformation plans. With all key growth drivers on the rise, Vietnam's economy also regained momentum in 2024.
In 2024, Vietnam's economy reached USD 476 billion, achieving a GDP growth rate of 7.09%, returning to a high level after the fluctuations caused by the pandemic during 2020-2021. GDP per capita rose by 8.7% year-over-year (YoY) to USD 4,700. Let's examine the three key economic drivers of Vietnam—exports, foreign direct investments, and domestic consumption—to see how they performed last year.
Exports: Demand for goods and services from global markets (+24% YoY from the US and +18% YoY from the EU), combined with a low base in the previous year, propelled Vietnam's total export value to USD 406 billion in 2024, a 14.3% YoY increase. Sectors with high growth rates of 21%-26% included electronics and computers, machinery and equipment, and wooden furniture. Export values are expected to grow at high single-digit levels in 2025.
Foreign investment: Vietnam continued to be a hotspot for FDI, particularly in the manufacturing sector. In 2024, USD 25.35 billion in FDI was disbursed in Vietnam, with approximately 80% allocated to manufacturing. Over the last decade, FDI disbursement has shown a consistent upward trend. Registered FDI, though fluctuating, consistently exceeded disbursed FDI, leaving room for future growth.
Domestic consumption: Despite a relatively weak start in the first half of 2024, Vietnam's consumer market showed signs of recovery starting in Q3 2024. This resulted in annual total retail sales of USD 250 billion, a 9% YoY increase. Domestic consumption is expected to recover further in 2025, driven by job creation, favorable policies, and a booming travel scene welcoming many international tourists.
On December 5, Vietnam's Ministry of Planning and Investment signed an MoU with the US-based NVIDIA Corporation to establish the Vietnam Research and Development Centre (VRDC) and the AI Data Centre. These new facilities will focus on AI research and development, as well as supporting AI startups.
Photo: Vietnam News Agency
CEO Jensen Huang stated that Vietnam is “the second largest supplier of software engineers in the world”, and it shows increasing focus and excellence in the STEM education field, which power the country’s potential to be the ‘second home’ for NVIDIA’s AI ecosystem. The Vietnamese government, aiming for a leading position in Asia's high-tech scene, has prioritized its technology workforce, including plans to train at least 5,000 local AI experts by 2030.
As Vietnam becomes an R&D hub for the world's leading AI company, Kenno's analysts anticipate unprecedented opportunities from this collaboration, particularly in job creation, talent development, and improved incomes in the AI space.
On December 19, the Asia Direct Cable (ADC) was officially launched, making it Vietnam's highest-capacity subsea cable network. This is the newest intra-Asian cable project, addressing growing data transmission demand and supporting the expansion of communication networks across the APAC region.
Illustration: Viettel
The ADC system, spanning nearly 10,000 km of submarine optical fiber cable, connects seven nodes along its route: Japan, Hong Kong, China, Vietnam, the Philippines, Thailand, and Singapore. It was co-implemented over six years by all participating countries, including Viettel Group from Vietnam.
With the ADC in place, Vietnam now has six submarine cable systems and plans to double this number by 2030. We see this development an important milestone for Vietnam's telecommunications infrastructure and a positive indicator, particularly for our investment in the technology sector (e.g. FPT).
On December 22, Metro Line 1 officially began operations in Ho Chi Minh City (HCMC). This marks a landmark moment for urban planning in southern Vietnam and is the first major step toward the city's long-term goal of transit-oriented development.
Photo: Tuoi Tre News
The metro railway, spanning nearly 20 km with 17 trains carrying up to 930 passengers each, is expected to facilitate a gradual shift from individual vehicles to public transportation in HCMC, reducing traffic congestion and emissions. Additionally, 17 new electric bus routes have been linked to metro stations for improved connectivity.
While Vietnam may lag slightly behind its regional peers in MRT transport, Kenno views the introduction of new commercial metro lines in both Hanoi and HCMC an important stepping stone for accelerating modern infrastructure development by 2035, ultimately improving quality of life and environmental impacts.
Vietnam has established the Central Steering Committee for Science and Technology Development and Digital Transformation as part of the Politburo's Resolution No. 57/2024. General Secretary To Lam signed the resolution on December 22, pledging to lead the newly established committee.
Photo: Vietnam News Agency
According to Resolution No. 57/2024, Vietnam's key goals toward 2030 include:
This initiative is among several major tech-related developments observed by Kenno following Vietnam's updated political structure last year, reflecting the government's dedication to investing in its digital economy. Considering the crucial role technology plays in the consumer market and our portfolio, we maintain a positive outlook on Vietnam's growth trajectory during this era of digital transformation.
And that’s a wrap for this month’s edition of Kenno Vietnam Pulse. We hope you enjoyed reading and found valuable insights into Vietnam’s market landscape. Feel free to subscribe to our monthly newsletter more timely, factual, and actionable updates. If you would like closer look at investment opportunities in Vietnam, we invite you connect with us for more information and tailored advice.
Laura Ranin
Disclaimer:
This document is prepared by Kenno Asset Management Pte. Ltd. ("Kenno"), the investment advisor for the Asia Top Picks Fund which is open only to professional investors. This marketing communication does not constitute investment advice. Please refer to Kenno’s official fund documents before making any final investment decision. The information provided in this document is accurate as of the time of writing. Kenno does not guarantee the ongoing accuracy or completeness of this information and is not responsible for updates or changes after publication.