Vietnam is predicted to overtake Thailand in economic size. The Vietnamese government aims for a real GDP growth of 8% in 2025 and over 10% in subsequent years, whereas Thailand’s growth is projected to decelerate due to domestic political instability and border tensions with Cambodia.
Nikkei Asia reports that Vietnam is on track to overtake Thailand in economic size as soon as this year, fueled by a major state-led infrastructure push. While Vietnam targets real GDP growth of 8% in 2025 and over 10% in the following years, Thailand’s growth is slowing. Domestic political uncertainty and border tensions with Cambodia are weighing on the Thai economy, with the OECD forecasting its real GDP will grow by only 1.5% in 2026.
The shift is driven largely by Vietnam’s nationwide infrastructure development, with public investment expected to increase by 26% in 2026. This includes a new airport near Ho Chi Minh City and a China-backed rail project already under construction. According to economist Can Van Luc, this investment alone could lift Vietnam’s growth by 1.6 percentage points, potentially making Vietnam Southeast Asia’s third-largest economy after Indonesia by 2027.
In contrast, Thailand is grappling with high household debt that stifles consumption and slow tourism recovery. The manufacturing sector is also seeing a retreat, with Suzuki Motor exiting vehicle production and Honda Motor scaling back output. While Vietnam still faces challenges with red tape and stalled projects, its aggressive investment strategy puts it on a path to surpass Thailand’s nominal GDP and reach a GDP per head of over $5,000.
Source: Khaosod, January 2026.