The country’s GDP is expected to expand 6.1% by the end of 2024 and 6.5% in the following year, the DW quoted the World Bank’s forecast.
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Workers assemble bicycles at the Thong Nhat Hanoi Joint Stock Company. |
Both projections are higher than what was predicted in April, with the increase in growth attributed to a rebound in manufacturing exports, tourism, and investment.
Vietnam could have larger growth in 2025 than other emerging economies such as Thailand, Cambodia, Malaysia, Indonesia and the Philippines, according to the report.
The article described foreign direct investment (FDI) as a factor fueling growth, elaborating the country, like many other Southeast Asian peers, relies heavily on FDI.
Between 2021 and 2023, FDI inflows into Vietnam, Thailand, Indonesia, Malaysia, Singapore and the Philippines averaged some 236 billion USD a year, the ASEAN Investment Report 2024 showed.
As Western investors are trying to diversify their supply chains amid geopolitical tensions, Southeast Asian countries are becoming a top choice for foreign investment from the U.S., Japan and the E.U.
Vietnam is one of the top choices for many firms’ China-plus-one policy due to geographical proximity and similar culture, the DW quoted Dr. Bich Tran, an adjunct fellow at the Center for Strategic and International Studies, as saying.
Particularly, the U.S. is Vietnam’s second largest trading partner and largest export market. Last year, the two nations upgraded their diplomatic ties to a comprehensive strategic partnership for peace, cooperation and sustainable development, which, analysts said, has helped promoted economic benefits of both sides.
The article highlighted that huge investment from the U.S. is key to economic opportunities for Vietnam, which has become a key manufacturing location for the U.S. tech giant Apple with investment of more than 15 billion USD over the past five years.
Furthermore, low labor costs and a young and large workforce, accounting for 58% of the population of almost 100 million younger than 35 years old, have made Vietnam an attractive bet for investment, it added.
Source: VNA