This Background Papers study analyzes output performance of Vietnam in transition years. Output performed surprisingly well during the core transition years. During 1988-89, output growth reached an average of 6-7 percent per year, well above the average of 4-5 percent achieved since the unification of North and South Vietnam in 1975. Output growth in these two years was driven by strong performance in the agriculture and services sectors. During the second phase of the transition, 1990-91, output growth slowed somewhat to 5-6 percent.