Vietnam’s economic projections now place it ahead of Thailand when economic size is adjusted for purchasing power, and the country is on course to overtake Thailand in nominal terms by around the end of the decade. However, Thailand remains considerably richer per person, indicating that overtaking it in economic size and catching it in prosperity are distinct milestones.
World Bank figures for 2025 show Thailand’s economy at US$577 billion, compared with US$514.7 billion for Vietnam. Despite this, Vietnam expanded by 8% in 2025, while Thailand grew by only 2.4%. This difference in momentum is expected to persist into 2026. The International Monetary Fund forecasts Vietnam to grow by 7.1% this year, significantly higher than Thailand’s projected 1.5%, which is the weakest forecast among major Southeast Asian economies.
The balance has already shifted when measured by purchasing power parity (PPP), which accounts for differences in local prices. IMF projections place Vietnam’s PPP-based economy at US$2.025 trillion in 2026, positioning it as Southeast Asia’s second largest economy behind Indonesia and ahead of Thailand. By 2031, the IMF anticipates the PPP difference between the two nations to surpass US$500 billion. Bangkok Bank’s Bnomics research team has arrived at a similar conclusion regarding the broader trajectory. Citing IMF projections, the team suggests Thailand could drop to fifth place among Southeast Asian economies by 2030, with both Vietnam and the Philippines moving ahead.
Vietnam’s rising GDP does not, however, signify that its citizens have become wealthier than their Thai counterparts. World Bank figures for 2025 indicate Thailand’s nominal GDP per person at US$8,056.60, approximately 59% higher than Vietnam’s US$5,066. When adjusted for purchasing power, Thailand still held the lead at US$26,250 per person, compared to Vietnam’s US$18,088.50. While GDP per person is not a complete measure of household welfare or quality of life, it highlights why the rankings for total economic size and individual prosperity can diverge significantly.
Vietnam did, however, cross another development milestone in July, when the World Bank upgraded its status from lower-middle to upper-middle-income following decades of rapid expansion initiated by the Doi Moi economic reforms in 1986. Vietnam’s next objective is to achieve high-income status by 2045. The World Bank estimates this will necessitate average per-capita GDP growth of around 6% annually for the next two decades, coupled with a transition towards higher-value manufacturing and services, enhanced skills, and greater investment in technology and innovation.
The effectiveness of Vietnam’s governance in managing this transition is likely to be as crucial as the pace of its manufacturing and export expansion. Bangkok Bank’s Bnomics team posits that Vietnam has benefited from policy continuity under its one-party political system and the state-directed market model established since Doi Moi. Their analysis contrasts this continuity with Thailand’s frequent policy shifts and slower progress on initiatives like Thailand 4.0 and the Eastern Economic Corridor.
Nevertheless, the World Bank has cautioned that Vietnam’s next developmental phase will require stronger institutions, not just growth. The institution has called for more predictable regulations, improved public investment, a more capable and accountable civil service, and an environment conducive to private businesses becoming more significant drivers of productivity. Other analysts have identified an additional challenge: Do Khuong Manh Linh from Vietnam’s Ho Chi Minh National Academy of Politics noted that while the Communist Party’s ongoing anti-corruption campaign has bolstered public trust, it has also led some officials to hesitate in approving major projects due to fear of subsequent scrutiny, resulting in bureaucratic delays.
Thailand is contending with its own structural challenges. The IMF projects growth of only 1.5% this year, while the Bank of Thailand reported household debt equivalent to 86.7% of GDP at the close of 2025. Thailand’s economy grew by just 1.9% year-on-year in the second quarter of 2026, with household consumption weakening.
Consequently, Vietnam appears increasingly likely to surpass Thailand in overall economic size if current trends persist. Bridging the considerably wider gap in income per person presents a different challenge, contingent on converting rapid expansion into higher productivity, robust domestic businesses, and sustained improvements in living standards. For Thailand, its existing advantage in income per person remains substantial, but its slower economic expansion means this lead cannot be assumed to endure indefinitely.