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Vietnam Emerges as a Stronger FDI Magnet Than Thailand
During periods of global economic uncertainty, foreign direct investment flows tend to concentrate in markets offering stronger long-term growth prospects. A survey conducted by KAE Marketing Consultant Company revealed that Vietnam was viewed as more attractive than Thailand for foreign direct investment during the global slowdown.
The study, based on interviews with senior executives from major multinational companies operating in both countries, indicated a clear preference for Vietnam as an investment destination. A majority of respondents selected Vietnam as their preferred market, reflecting growing confidence in its economic trajectory and structural growth potential.
At the time, Vietnam had delivered sustained GDP growth averaging above 7 percent over two decades, positioning it as one of Southeast Asia’s fastest-expanding economies. The country’s rapid industrialization, expanding consumer base, and improving regulatory environment strengthened its appeal relative to regional competitors.
A key structural advantage lies in Vietnam’s lower GDP per capita compared to Thailand and China. This gap implies significant headroom for consumption growth, urbanization, and rising household income. For investors, such dynamics signal long-term demand expansion across sectors including automotive, healthcare equipment, and digital commerce.
Damien Duhamel, then Director of KAE Asia, highlighted Vietnam’s strong momentum and projected accelerated sectoral growth in automotive, healthcare technology, and e-commerce. These sectors, supported by demographic trends and rising middle-class purchasing power, were expected to outpace regional peers.
However, Vietnam’s growth story was not without risk. Inflationary pressures and volatility in consumer price indices were identified as potential concerns for foreign investors. Rapid expansion can create structural imbalances if not carefully managed.
Despite these risks, Vietnam’s positioning as a high-growth frontier market differentiated it from more mature Southeast Asian economies. While Thailand offered stability and established infrastructure, Vietnam presented a higher-growth narrative supported by structural transformation and rising global integration.
Over time, this competitive dynamic between Vietnam and Thailand has shaped broader investment patterns in ASEAN. The survey findings underscored a fundamental principle of foreign investment strategy: markets offering long-term structural growth often outweigh short-term macroeconomic volatility.