A golden time to shine within ASEAN

Tim Evans, CEO, HSBC Vietnam

Vietnam is currently one of the most dynamic economies in Southeast Asia, closing 2025 with a strong performance of 8.02 per cent GDP growth, which has been driven by strong manufacturing, exports, services, foreign direct investment (FDI), and growing domestic consumption. In the past 20 years, Vietnam has grown to become a major manufacturing hub, integrated into global supply chains. Indeed, the country has become a primary beneficiary of supply chain diversification. It is no longer just about textiles. Vietnam is moving up the value chain into semiconductors, electronics, and automotive manufacturing. By late 2025, Vietnam accounted for approximately 75 per cent of all game console exports to the United States, highlighting its sophistication in high-tech assembly and component production.

The boom in manufacturing and exports has been mainly boosted by the strong inflows of FDI. For years, the country has been an FDI magnet, leading to inflows that are well above its GDP and among the highest in ASEAN (as a share of GDP). It has entered many active and planned trade deals and is a member of many major international organisations. This deepens its connection to global value chains and creates an even more attractive environment for FDI.

Vietnam’s digital economy holds huge potential given strong government support, high internet and smartphone penetration. The country has been among the fastest growing digital economies in ASEAN, reaching $39 billion in 2025 with strong double-digit growth across sectors, and is expected to hit $85-190 billion by 2030. It is logical for Vietnam to continue to leverage technology and digital transformation so as to overcome the middle-income trap.

Digital transformation is seen as a way to further liberate creativity and improve productivity across all sectors. The government has set ambitious goals for the digital economy, aiming for it to account for 30 per cent of GDP by 2030. Significant opportunities have emerged in e-commerce and video commerce, which remains the backbone of the digital economy.

It is worth mentioning that Vietnam currently leads Southeast Asia in AI engagement and trust, with 81 per cent of users interacting with AI tools on a daily basis. There are obvious opportunities in localised AI agents, Vietnamese language models, and AI-driven customer service. On the other hand, the government’s aggressive push towards a cashless society has made digital financial services a high-growth sector. Gross transaction value for digital payments is expected to hit $300-400 billion by 2030, representing unparalleled future potential.

The domestic consumer market is also reaching a critical tipping point. Vietnam is set to become the 10th largest consumer market in the world by 2030, larger than that of the United Kingdom, Germany and Turkey. Its middle class is expanding by an average of 17 per cent annually towards 2030, which is helping to fuel a retail market valued at over $270 billion. Vietnam is among the countries expected to see the biggest increase in consumer spending in the next decade.

This rising disposable income and spending is shifting demand towards premium goods, modern healthcare, private education, and green energy solutions, as consumers become more health-conscious and environmentally aware.

Last year, FTSE Russell confirmed the long-awaited reclassification of the equity market from frontier to secondary emerging status, which should take effect in September, subject to an interim review in March. Once it happens, it will be a recognition of years of coordinated efforts by the government, regulators, and market participants.

For Vietnam, shedding the frontier label can profoundly reshape investor behaviour and confidence, altering the trajectory of its continued long-term economic development and reducing dependence on any single trading partner. HSBC Global Investment Research suggests the potential for foreign inflows could eventually range between $3.4 billion and $10.4 billion from active and passive funds following the inclusion.

Vietnam is decisively entering a breakthrough era, defined by an unprecedented synergy of bold ambition, sweeping institutional reform, and massive public investment. The country has set a bold goal to become a high-income nation by 2045. This vision is backed by a record-breaking public investment plan, prioritising well over 200 major national infrastructure projects including expressways, airports, seaports, and railways. By spending around $130 billion, Vietnam is building the physical backbone for long-term growth.

Additionally, institutional reforms such as the international financial centre are designed to lower the cost of doing business; and training 100,000 new engineers in high-tech fields proves Vietnam is ensuring its people are ready for the future. This combination of improving infrastructure and the transformative shift in governance shows that Vietnam is completely reinventing itself as a top-tier place to live and do business in Asia.