HANOI: Vietnam is on track to overtake Thailand in economic size measured by nominal GDP as soon as this year, helped by a major state-led infrastructure investment push that is accelerating growth, Nikkei Asia reported.
Asean’s economic landscape is shifting as domestic political uncertainty and border tensions with Cambodia weigh on Thailand’s economy and slow its growth.
Vietnam’s real GDP in 2025 is expected to expand by around 8%, and Hanoi has set a target of more than 10% growth in 2026 and the years that follow. While some see the goal as overly ambitious, Prime Minister Pham Minh Chinh has insisted that double-digit growth is achievable, reiterating the point at an economic event in December.
If growth accelerates as planned, Vietnam’s nominal GDP could reach the mid-US$500 billion range in 2026 or 2027, overtaking Thailand and potentially becoming Southeast Asia’s third-largest economy after Indonesia. GDP per head would also rise above US$5,000, approaching Indonesia’s level.
The main driver is nationwide infrastructure development. Public investment plans for 2026 are expected to increase by about 26%, which could lift economic growth by 1.6 percentage points, according to Can Van Luc, chief economist at the state-owned Bank for Investment and Development of Vietnam (BIDV).
This is reflected in projects such as a new airport near Ho Chi Minh City due to open in 2026, while a China-backed rail project in the north has already begun construction.
Even so, legal reforms and cutting red tape are still seen as crucial to sustaining investment in the next phase. Can Van Luc said more than 2,000 investment projects remain held up by unresolved issues.
Meanwhile, the Organisation for Economic Co-operation and Development (OECD) forecasts Thailand’s real GDP will grow by only 1.5% in 2026, down 0.5 percentage points from the previous year.
High household debt is also weighing on domestic consumption, tourism has been slow to recover, and US import tariffs are adding pressure on manufacturing. In recent years, Suzuki Motor has exited four-wheel vehicle production in Thailand, while Honda Motor has scaled back output. – The Nation/ANN