The economic map of Southeast Asia is being redrawn. Following a week of landmark data releases from Hanoi, it is now clear that Vietnam is on the verge of a historic achievement. As of January 2026, Vietnam is officially on track to overtake Thailand as the third-largest economy in the region. This shift is occurring much faster than many global analysts predicted.
The momentum behind this change is undeniable. On January 5, Vietnam’s National Statistics Office reported that the country’s GDP grew by a staggering 8.02% in 2025. This represents the second-highest growth rate in the last 15 years. This surge propelled Vietnam's nominal GDP to $514 billion.
Defying the Odds: The Tariff Breakthrough
While critics feared these levies would cripple Vietnam's export-led model, the results tell a different story.
Exports to the U.S. actually jumped 28% in 2025. They reached $153 billion. This occurred despite the "Liberation Day" tariffs initially threatened by the U.S. administration. Hanoi successfully negotiated a framework in July 2025 that finalized a 20% reciprocal tariff.
Vietnam agreed to open its markets to American cars and agricultural products. This strategic shift effectively turned a potential trade war into a balanced partnership. Beyond exports, the economy was powered by an 8.6% rise in the services sector. It also saw nearly 9% growth in industry and construction.
The Regional Leaderboard: A New #3
Thailand currently holds the #3 spot in ASEAN. However, it is facing a starkly different reality. While Vietnam sprints ahead, Thailand is grappling with structural hurdles. These include high household debt and a slow recovery in manufacturing.
In terms of the 2025–2026 metrics, Vietnam is outpacing its neighbor by a wide margin. Vietnam recorded an 8.02% GDP growth in 2025, while Thailand struggled with a rate of approximately 1.8%. Vietnam's nominal GDP now stands at $514 billion, closing in fast on Thailand’s estimated range of $540 billion to $560 billion. Looking ahead, the Vietnamese National Assembly has set an ambitious growth target of 10% for 2026. This contrasts sharply with the OECD projection for Thailand, which anticipates a further slowdown to 1.6%.
If the Vietnamese government hits its 10% target, Vietnam will likely surpass Thailand’s total nominal GDP by the end of this year. Achieving this would place Vietnam behind only Indonesia and Singapore in the regional hierarchy.
Why the Momentum is Sustainable
The "Big Change" isn't just about numbers. It is about a massive structural investment in the future.
In 2026, Vietnam is increasing public investment by 26%. This includes the opening of the new international airport near Ho Chi Minh City. It also includes the construction of China-backed high-speed rail links in the north.
Companies continue to flock to Vietnam. Luxshare-ICT recently announced a massive expansion for VR equipment production. Global tech giants are pivoting their supply chains toward Hanoi and Hai Phong. The domestic strength is also evident. The retail and services market hit $270 billion in 2025. This shows that Vietnamese consumers are spending more than ever.
The Long Game: Aiming for #2
While overtaking Thailand is the headline for 2026, Vietnam has even bigger goals. Most long-term forecasts project that Vietnam will surpass Singapore by 2035. This includes the latest World Economic League Table from the CEBR. At that point, Vietnam is expected to become the second-largest economy in Southeast Asia. It is projected to become the 27th largest in the world.
Vietnam has transitioned from a recovery phase into a full-speed acceleration. The race is on.
