Standards Chartered forecasts the Vietnamese economy will grow 7% in H2. (Photo: hanoimoi.com.vn)

Despite a slow growth amid global economic headwinds, Vietnam is performing better than most countries and is still an attractive destination for foreign direct investment (FDI) in the manufacturing sector, according to the International Monetary Fund (IMF) and Singapore-based DBS Bank as cited by Fibre2Fashion.

In an assessment of Vietnam’s economic situation in the first half of this year, both said a gradual easing of monetary policies, reducing taxes, and expanding public spending have helped mitigate the impact of headwinds.

The IMF noted that Vietnam's economic growth would recover in H2 while inflation is likely to be under control below the State Bank of Vietnam's 4.5% target.

Meanwhile, Standards Chartered expected the economy to grow 7% in H2.

The country's economic stability and openness are key drivers for its promising mid-term outlook, a continued recovery of tourist arrivals will help strengthen the services balance, while maintaining investment inflows might need an enhanced global environment and concerted efforts from the Vietnamese Government, the bank said.

Sputnik News of Russia cited DBS Bank as saying that with the FDI registered in H1 increasing about 30% year on year, despite many challenges, Vietnam is still an attractive FDI destination thanks to the shift in supply chains, many free trade agreements, a medium-term growth outlook of 6% - 7%, and a developing electronics ecosystem.

It noted the surge in FDI inflows into the manufacturing sector this year reflects foreign investors’ sustained confidence in Vietnam’s long-term potential.

According to Asia Business Outlook of India, Vietnam is one of the fastest-growing digital economies in Southeast Asia. Against this backdrop, strong governmental support such as competitive tax incentives coupled with Vietnam’s skilled labor market have played a strong role in enabling the country to serve as an offshore manufacturing hub as businesses look to diversify and strengthen their supply chains.

Vietnam is a country on the rise, with a growing economy, stable political environment, and a relatively young workforce, making it an attractive destination for businesses looking to expand their operations in Asia.

“As Vietnam continues to develop and grow, we can expect to see an increase in foreign investment and opportunities for businesses looking to tap into this dynamic and exciting market,” an article on Asia Business Outlook wrote.

Technode Global cited Tracxn Technologies Ltd. as saying in a recent statement that the Vietnamese tech startup ecosystem has emerged as the third-highest funded startup ecosystem in Southeast Asia.

The start-up ecosystem of Vietnam holds significant potential for growth, thanks to the country’s government support measures such as tax exemptions for information technology (IT) companies and land rent concessions. The government’s commitment to establishing a cashless economy will contribute to the development of the FinTech ecosystem in the region, Tracxn added.

Source: VNA