VINACHEM

The economy of Viet Nam is going though a dynamic shift, marked by robust growth and the development of several key trends supporting a stronger looking future, noted Asia- wide consulting network Asian Insiders in a recent article.

According to Asian Insiders, the IMF places Viet Nam among the top twenty fastest growing global economies.

The population of Viet Nam is around 102 million and with a nominal 2024 GDP at US$ 469 billion, the 35th largest in the world or 26th if measuring by PPP.

In modern times, the economy of Viet Nam is centrally directed through a series of five-year plans. These are a series of economic development initiatives, broadly shaped by the central government, mapping strategies for economic development, growth targets and launching reforms.

Recognizing the need for technical innovation for the economy of Viet Nam, the government has made substantial investments in research and development, evident both in the rapidly improving economy as well as its ascent on the Global Innovation Index (GII), ranking 46th of 132 countries in 2023, according to the GII report released by the World Intellectual Property Organization (WIPO). The country maintains its second position amongst lower middle-income countries.

Improvement in innovation and technical competence is key to attracting significant investment from industry, especially as most major manufacturers seek to diversify their production as well as take advantage of Viet Nam's still lower labor rates.

Companies like Samsung, LG, Foxconn, Panasonic, Bosch, GE, Piaggio and Yamaha have established either local research and development facilities or a full manufacturing base – underlining Viet Nam's potential for being an innovation as well as production hub.

Viet Nam's geographic location supports this also, its long 3,300km eastern coastline offering 45 seaports of various grades. The economy of Viet Nam is significantly enhanced by recent and looming improvements to its infrastructure.

The improving economy of Viet Nam is made possible with the major influx of foreign direct investment (FDI). The country has been successful in attracting significant investments making it one of the top countries globally in attracting FDI. In 2023, Viet Nam attracted US$36.6 billion, a 32 percent increase on the previous year. Further this includes newly registered capital of around US$20 billion, a remarkable increase of 62 percent on the previous year. That reflects 3,188 newly registered projects in 2023.

Viet Nam is looking to take a leading role also in the green economy and sustainability, with the Ministry of Planning and Investment last year announcing ambitious goals of increasing the green economy contributions to GDP from US$6.7 billion in 2020 to a remarkable US$300 billion by 2050. The plan offers domestic and international business partners a framework with which to align their strategies, with a potential to contribute US$40-50 billion annually.

With strong GDP growth, a solid increase in FDI and significant improvements in infrastructure, Viet Nam remains one of the globe's rising economies. With the labor market rebounding and a surging middle class, there is a noticeable uptick in domestic consumption.

The double impact of export-driven growth and a thriving domestic market position the economy of Viet Nam for sustained and dynamic growth, highlighted Asian Insiders./.   – VGP –