Hanoi:Vietnam's economic growth trajectory remains strong, with its quality hinging on the integration of the domestic economy, as noted by Qatar National Bank (QNB) in its recent economic commentary.
According to Qatar News Agency, despite the robust growth, much of Vietnam's export boom is dominated by foreign enterprises. The nation has seen a surge in technology investment and domestic demand, which presents an opportunity to strengthen local economic linkages. This potential can be realized through investments in skills, accelerated project execution, and the bolstering of local suppliers.
In recent years, Vietnam has emerged as a significant growth story within the global economy. The country's real GDP grew by 9.95% year-on-year in the third quarter of 2026, marking the swiftest quarterly growth in four years and lifting the nine-month growth rate to 9.01%. This momentum builds upon an 8.02% expansion in 2025, which was the strongest performance since 2011. The expansion has been driven by a historic influx of foreign direct investment (FDI), with registered commitments increasing by 76.4% to USD 50.4 billion in the first nine months of the year, and disbursements reaching their highest in five years. The World Bank recognized these achievements by reclassifying Vietnam as an upper-middle-income economy in July 2026. The Vietnamese government aims for annual growth of at least 10% through 2030, positioning the country as Asia's next "tiger" economy, following in the footsteps of Korea and Taiwan.
However, Vietnam's economic growth is characterized by a dual-speed economy. The foreign-owned, export-oriented manufacturing sector is booming, with FDI firms responsible for the majority of high-tech exports and the importation of components and machinery necessary for production. In contrast, domestic firms remain primarily involved in low value-added activities such as assembly, processing, and ancillary supply.
This reliance on imported inputs is evident in trade data, as imports grew by 36.7%, outpacing exports at 24.5%, partly due to higher energy prices, with China being the largest source of imports at USD 187.3 billion. While Vietnam's growth appears set to continue, its sustainability depends more on the ability of domestic firms to capture a larger portion of the created value rather than solely relying on foreign investment.
The report identifies three critical factors that will determine the broader economic benefits of foreign investment the structure of the FDI-led export sector, the quality of new technology investments, and the strength of domestic demand. The FDI-led export sector remains weakly integrated with the domestic economy, as foreign investment predominantly flows into manufacturing. Foreign-invested firms accounted for 80.7% of total exports, with most inputs sourced abroad and limited local economic spillovers.
A shift in foreign investment towards higher value-added activities, such as semiconductors and AI, offers potential for greater economic spillovers. Projects like an advanced chip-packaging plant and an AI data center in Ho Chi Minh City require skilled labor and specialized services, providing opportunities for domestic firms and workers to advance within the value chain.
The government supports this transition with financial incentives for semiconductor and R&D projects. However, challenges such as skilled labor shortages, regulatory hurdles, and limited infrastructure persist, potentially delaying project execution. Although registered FDI increased significantly, much of the investment pipeline has yet to materialize.
Meanwhile, the domestic economy is gaining momentum, providing a stabilizing force for growth. In the first nine months of the year, final consumption grew by 8.5%, and capital formation increased by 17.8%. Public investment is significant, with the government advancing large-scale infrastructure projects worth an estimated USD 200 billion, leading to a 19% increase in state budget investment. This improved infrastructure reduces logistics costs and connects domestic firms to markets, enhancing business dynamism. Approximately 111,700 new firms were registered in the first half of the year, marking a 22.5% increase. Unlike exports, these domestic growth drivers are less vulnerable to US trade measures, partly mitigating the foreign-led sector's vulnerabilities.