Loading containers at Cai Mep port in Ba Ria-Vung Tau province (Photo: VNA) London (VNA) – The UK’s magazine The Bankerhas run an article highlighting optimistic opinions of experts on Vietnam’s economicoutlook in 2024.
Vietnam saw gross domestic product growth of 5.1% in 2023, whichis forecast to rise 6–6.5% in 2024, making Vietnam one of the strongest growth environmentsin Southeast Asia, the article noted.
The article quoted Khanh Vu, Deputy Managing Director atVinaCapital Fund Management as saying that the pick-up in GDP growth will bedriven by rising exports and manufacturing, tourism, and a modest recovery indomestic consumption and consumer sentiment. Economic growth has also beensupported by a favourable interest rate environment, he added.
Helmi Arman, economist at Citi, a US-based financial servicecompany, said that after a freeze in early 2023, activity in the real estatesector has picked up in the second half of the year. The government is pushingthrough structural reforms that lay the foundation for a more sustainablerecovery in the real estate sector.
The article underlined that for international investors,Vietnam’s manufacturing sector remains the most appealing, specifically in thesmartphone supply chain and for consumer electronics. For domestic investors,garment, footwear, and furniture exports are gaining the most interest.
Both Vu and Kenglin Tan, senior portfolio manager, equitiesat Manulife Investment Management, showed optimism about Vietnam’s exportprospects thanks to signs of stabilisation.
There was some trepidation that Vietnam’s decision toimplement the global minimum tax rate would impact investment flows, but thishas not transpired, Tan said, adding that from a foreign investor perspective,whether they invest in Vietnam or other countries in the agreement like Mexicoor Thailand, they are impacted by the same policy. It can be seen from FDI flowsin December 2023 after the policy was announced, that investors have not beendeterred at all, she underscored.
There has also been a surge in interest in the FDI space. Vunoted that the Republic of Korea has pledged its support in investing in Vietnam,stating plans to exceed 100 billion USD in total investment by 2025. To date,the country has invested 84 billion USD into Vietnam. The focus is on manufacturing,with 62 billion USD invested into more than 4,600 projects, with large manufacturersincluding Samsung, LG and SK. A major project benefiting from FDI support isLong Thanh International Airport, being constructed close to Ho Chi Minh City, theexpert stated, underlining that FDI support for the project has come from theUS, Japan, France, Turkey, and the Netherlands.
To further extend the potential for internationalinvestment, Vietnam is opening up its stock market settlements by allowingdomestic brokers to vouch for foreign investors, enabling them to purchaseshares. Arman says allowing greater levels of foreign ownership could mitigateagainst future shocks.
In the field of tourism, the experts noted that the sector isat 70% of pre-COVID-19 levels, but domestic tourism is booming. Chinesetourists were 30% of their pre-COVID-19 levels last year.
The article cited a report from data company Vietnam ReportJSC finding 66% of respondents in the tourism and hotel sector expressingconfidence for 2024. Of the respondents, 93% stated the new visa rules would bea lever for the country’s tourism growth trajectory, according to the report./.
