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Thailand still ahead of Vietnam in GDP despite 2026 overtake talk

Thailand’s nominal gross domestic product was US$577 billion in 2025, more than US$60 billion larger than Vietnam’s US$514 billion, World Bank data show.

Source: RSS · August 25, 2026 at 8:56 PM · AI-assisted report

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BANGKOK, 26 AUGUST 2026 —

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Thailand vs Vietnam in 2026: The Economic and Tourism Race in Southeast Asia

Market Impact

BANGKOK/JAKARTA — The debate over whether Vietnam will overtake Thailand as Southeast Asia’s third-largest economy has intensified, with projections suggesting Hanoi could surpass Bangkok in nominal GDP as early as this year. While Vietnam’s rapid growth—fueled by state-led infrastructure projects and foreign investment—has captured global attention, Thailand retains key advantages in income levels, tourism revenue, and institutional maturity.

Vietnam’s economy expanded by 8.02% in 2025, reaching a nominal GDP of approximately US$514 billion, according to government data. The government has set a target of 10% annual growth from 2026 to 2030, supported by infrastructure investments such as the new Long Thanh International Airport near Ho Chi Minh City and a China-backed railway in the north. Public investment is projected to rise by 26% this year, with economists at BIDV Bank estimating this could add 1.6 percentage points to growth. Foreign direct investment (FDI) disbursements hit US$27.6 billion in 2025, the highest in five years.

Thailand’s economy, however, remains larger in absolute terms. The World Bank estimates Thailand’s nominal GDP at US$577 billion in 2025, surpassing Vietnam by more than US$60 billion. Growth in 2025 was 2.4%, beating initial expectations, though the National Economic and Social Development Council (NESDC) has revised its 2026 forecast to a range of 1.5% to 2.5%, with the OECD projecting the lower end at 1.5%. This would make Thailand the slowest-growing major ASEAN economy in 2026.

Kristy Hsu, director of the Taiwan ASEAN Studies Center at the Chung-Hua Institution of Economic Research, has cautioned that Vietnam is unlikely to surpass Thailand this year. Based on IMF data, she noted that even if Vietnam grew at 10% while Thailand managed just 2%, the gap would not close by 2026. Any temporary lead could also reverse due to currency fluctuations, as nominal GDP rankings are sensitive to exchange-rate movements.

The per-capita income gap further underscores Thailand’s advantage. Vietnam’s GDP per capita reached US$5,026 in 2025, while Thailand’s stood at US$8,201, up from US$7,539 in 2024. Despite Vietnam’s larger population of 100 million compared to Thailand’s 66 million, Thailand’s higher productivity and living standards place it a full development tier ahead.

Vietnam’s Trade Surge Outpaces Thailand’s

While Thailand retains the edge in overall economic size, Vietnam has already won the trade race. Vietnam’s exports reached US$475 billion in 2025, a 17% year-on-year increase, driven by electronics manufacturing for global brands such as Samsung and Apple. Thailand’s exports totaled US$335.1 billion, growing 12.7% but still trailing by US$140 billion. Vietnam’s total trade turnover crossed US$930 billion, placing it among the world’s 25 largest trading economies.

However, Vietnam’s export boom is heavily reliant on foreign-invested firms, which account for 77% of its exports. This dependence highlights structural vulnerabilities, as much of the growth stems from multinational supply chains rather than domestic industrial development. Meanwhile, Thailand’s automotive sector—once a regional leader—has seen retrenchment, with Suzuki exiting car production and Honda scaling back operations.

Tourism: Vietnam Gains in China, Thailand Dominates Overall

Vietnam’s tourism sector had a record year in 2025, welcoming 21.2 million international visitors, a 20.4% increase from 2024 and 18% above pre-pandemic levels. A key milestone was overtaking Thailand as the top destination for Chinese tourists, attracting 5.3 million visitors compared to Thailand’s 4.47 million, following a 34% collapse in Chinese arrivals to Thailand amid safety concerns linked to scam center kidnappings.

Hanoi has set ambitious targets, aiming for 25 million foreign visitors in 2026 and 50 million by 2030. However, Thailand remains the region’s tourism powerhouse. In 2025, Thailand received 32.97 million arrivals, a 7.23% decline from the previous year—the first non-COVID annual drop in years. Malaysia replaced China as Thailand’s top source market, reflecting shifting travel patterns. Through the first four months of 2026, Thailand recorded 11.7 million arrivals, compared to Vietnam’s 8.8 million.

Thailand’s tourism revenue remains far higher. Foreign visitor spending alone generated 1.53 trillion baht (US$42 billion), with total tourism revenue estimated at 2.6 trillion baht (US$80 billion) when domestic travel is included. Vietnam’s tourism revenue passed 1 quadrillion dong (US$39 billion) in 2025, but this includes domestic travel, which accounts for a significant portion of spending.

Former Tourism Authority of Thailand (TAT) governor Yuthasak Supasorn has attributed Thailand’s advantage to its value-driven tourism model. The average visitor stays more than nine days and spends around 47,000 baht (US$1,300) per trip, supported by a mature long-haul market that delivered over 10 million high-spending travelers in 2025. Vietnam, by contrast, remains volume-driven, with considerable room to increase spending per visitor.

Structural Challenges Hold Vietnam Back

Despite its rapid growth, Vietnam faces key structural hurdles that explain why it has not yet overtaken Thailand. The World Bank estimates that power outages in 2023 cost Vietnam US$1.4 billion, or 0.3% of GDP, in lost industrial output, highlighting weaknesses in its energy infrastructure. Thailand, meanwhile, maintains a more reliable power grid and a mature industrial ecosystem built over four decades.

Bureaucratic inefficiencies also pose risks. BIDV chief economist Can Van Luc has noted that more than 2,000 investment projects remain stalled due to unresolved legal issues. Analysts emphasize that regulatory reform is critical to sustaining Vietnam’s economic momentum.

Institutional maturity is another differentiator. As the EU’s Carbon Border Adjustment Mechanism (CBAM) takes effect in 2026, Thailand’s more established ESG and carbon accounting frameworks give it a compliance advantage over Vietnam, which still relies heavily on foreign firms for emissions tracking.

Outlook: A Race Still in Progress

The Centre for Economics and Business Research (CEBR) in London forecasts that Vietnam will surpass Thailand after 2028, reaching a GDP of US$994 billion by 2035—outpacing Singapore as well. For now, however, Thailand retains its position as Southeast Asia’s third-largest economy, with stronger per-capita incomes, higher tourism revenue, and deeper institutional resilience.

While Vietnam’s export-driven growth and tourism gains in key markets like China signal its rising influence, the structural gaps in infrastructure, regulation, and institutional capacity suggest that Thailand will remain a regional leader in the near term. The race is far from over, but the crown has not yet changed hands.

Related: Bangkok

Reporting based on RSS. Figures and claims are subject to revision as the story develops. DomainFork publishes editorial context, not investment advice — see our editorial standards.