L’export to Vietnam for Italian companies represents a significant opportunity in a fast-growing economic environment. Vietnam's gross domestic product (GDP) increased by 7.09% in 2024 from the previous year, exceeding the 6.5% target set by the National Assembly, according to data from the Vietnam General Bureau of Statistics reported by Vietnam News.
The estimated total GDP for 2024 is more than $476 billion, with a GDP per capita of $4,700. The average consumer price index is Increased by 3.6% over 2023, while core inflation increased by an average of 2.7%. Foreign direct investment in 2024 reached the highest level since 2020, exceeding $25 billion, an increase of 9.4% over the previous year.
The main sectors that contributed to this growth were services and industry, followed by agriculture, forestry, and fisheries. This progress occurred despite several natural disasters, including Typhoon Yagi in September 2024, which not only claimed more than 300 lives but also caused at least $3 billion in damage.
The World Bank predicts that in 2025 the Vietnam will register the fastest growing economy among all developing economies in East Asia. This forecast, which places Vietnam above its regional neighbors, highlights the’impressive progress of the country, supported by structural reforms, a booming manufacturing sector, and a business strategy geared to the’internationalization.
After a past of modest economic performance, overshadowed by the big Asian giants, Vietnam has emerged as one of the most dynamic emerging markets globally. Since 2010, it has been ranked among middle-income countries, with the ambitious goal of becoming An industrialized country by 2030.
Vietnam's economic growth has been vigorous in the past decade: nearly 7% annually in 2015-19, 3% in 2020 and even 8% in 2022. According to World Bank forecasts, Vietnam's economic growth will be. Could reach 6.5% in 2025, compared to a regional average of 4.5% for other East Asian developing economies. This figure not only testifies to Vietnam's resilience in the face of global challenges, but also demonstrates its Ability to reposition itself in global supply chains, especially in the context of trade tensions between major powers.
In fact, over the past decade, Vietnam has established itself as a major industrial hub in the region, attracting substantial foreign direct investment (FDI) in key sectors such as electronics, textiles and automotive. Recently, the country has further consolidated its position by diversifying its trading partners and exploiting free trade agreements with the’European Union, the United States and other economic blocs.
The country is a major gateway to Southeast Asian markets, attracting great interest among Italian SMEs that see Hanoi as an ideal platform to expand into the ASEAN market.
Several factors explain Vietnam's marked economic growth. In particular, the manufacturing sector Vietnam, already a mainstay of the economy, continues to develop at a rapid pace. The country is benefiting from the relocations of companies, particularly Chinese ones, seeking to diversify their production bases because of the trade tensions between China and the United States. Second, Vietnam is investing heavily in modernizing its infrastructure to support industrial expansion.
The manufacturing sector, supported by strong inflows of foreign investment attracted by local incentives and the availability of young, skilled and cheap labor, is the country's growth engine. The industrial structure is constituted at 96% by SME, dynamic and determined to acquire advanced products, machinery, technology and management models to fit into the highest value-added international production chains. The advantages offered by free trade agreements, such as those of ASEAN, CPTPP and RCEP, further boost Vietnam's profile as a manufacturing hub.
This growth offers significant opportunities for the’export to Vietnam, making the country an attractive market for global companies seeking to expand their presence in Asia.
In recent decades, Vietnam has made remarkable progress through targeted economic reforms. After the end of the Vietnam War in 1975 and the U.S. trade embargo until 1994, the market reforms of the 1980s have attracted foreign investmenti and increased exports. ASEAN membership in 1995 and WTO membership in 2007, along with the “strategic global partnership” with the United States in 2023, have strengthened the country's international relations.
Economic reforms have taken Vietnam from one of the poorest nations in the world to A middle-income economy within a few decades. Now, with the cyclical recovery underway, favorable demographics, and the imminent transition to emerging market (ME) status, the country seems poised for another major step forward in its transformation.
With confidence in China declining due to rising labor costs and an uncertain economic outlook, Vietnam is in pole position to Attracting manufacturers who want to reduce exposure to Beijing.
Foreign direct investment (FDI) in Vietnam Have reached $2.8 billion in the first two months of the year, an increase of 9.8% over 2023. Singapore, Hong Kong and Japan are the main sources of investment, with Samsung as the largest foreign investor.
The country boasts a well-balanced economy with a current account and trade surplus. The 2023 debt-to-GDP ratio is moderate at 37%. Demographics continue to support growth, with an expanding middle class expected to exceed 75 million by 2030.
The Ho Chi Minh City Stock Exchange (HoSE) is currently classified as a frontier market, but Vietnam is trying to get the emerging market status, which could generate net foreign inflows of $30 billion by 2030.
Investor interest in Vietnam is set to increase, thanks to the Korea Exchange's (KRX) new technology system that will improve stock market liquidity. This strengthening is one of the reasons why the’export to Vietnam is becoming increasingly relevant, positioning the country as a focal point for Italian companies looking to expand their business beyond national borders.
Vietnam is emerging as a major technology hub due to the availability of highly skilled programmers at competitive costs. In fact, global technology companies are increasingly recognizing the nation's potential, investing in infrastructure and human resources to take advantage of local talent. The presence of programmers costing about 90% less than those in the United States and 15% less than those in India makes Vietnam a very attractive option for IT outsourcing.
According to the’Kearney's latest Global Services Location index, Vietnam is classified as lhe world's seventh most attractive location for IT outsourcing. This recognition underscores Vietnam's growing importance as a technology hub, pushing the country to continue to qualify its workforce to meet global demand.
The entry into force of the European Vietnam Free Trade Agreement (EVFTA) in August 2020 eliminated customs duties and red tape, facilitating trade in key goods such as electronics, foof&beverage products and pharmaceuticals, and greatly opening the Vietnamese market to exports of EU services, such as transportation and telecommunications. This represents a significant advantage for the’export to Vietnam, enabling European companies to access a fast-growing market with lower trade barriers.
As mentioned earlier, Vietnam is also investing massively in infrastructure improvements, recognizing that this increases the country's competitiveness. With investments amounting to 5.7% of GDP, Vietnam leads the region in terms of infrastructure spending, with tax incentives in railways and solar energy a sign of a growing focus on renewable energy.
Vietnam's rapid demographic and social change is also of interest. The population has surpassed 99 million and is expected to reach 120 million by 2050. With 70% of the population under the age of 35, the middle class, currently 13% of the population, is expected to reach 26% by 2026 (Source: Export.gov.co.uk). This demographic development further expands the opportunities for exports due to an increasingly large and diverse consumer base.
Vietnam represents a Strategic partner for Italy in Southeast Asia, while Italy ranks as Vietnam's second largest trading partner in the European Union. In recent years, trade between the two countries has been growing steadily, with significant increases in 2021 and 2022. Italy mainly exports leather, industrial machinery, textile products and clothing in Vietnam, which in turn exports phones, electronics and seafood products to Italy.
Benefiting from the EVFTA agreement, cooperation between the two countries is facilitated, prompting Vietnamese companies to modernize their production processes with Italian technologies of the highest level. The “Made in Italy” is seen in Vietnam as synonymous with quality and innovation, opening up further opportunities for Italian products.
The agreement also promotes the sustainable development and environmental protection, sectors where Italian products can have a significant impact, especially in the food sector. Thus, a scenario is envisaged in which trade relations between Italy and Vietnam will continue to strengthen, with mutual benefits.
Octagona, a leader in the’internationalization of enterprises, is ready to support companies from all sectors eager to expand their market in Vietnam and other Southeast Asian countries. Contact us for more information on how to seize these growth opportunities.
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