A garment-textile factory in Vietnam (Photo: VNA) Hanoi (VNA) – Vietnam’s economy has started to thrive while most of Asian economies is slowing economically and moving towards consumer-led growth, the Standards & Poor (S&P) fund said in its recent report.
According to S&P, four years ago the Vietnamese economy was struggling with non-performing loans as the Government focused on feeding credit to its State-owned enterprises.
However, since then the country has attracted sufficient foreign direct investment (FDI) to drive strong export growth despite sluggish demand and falling global prices.
Electronics exports have been growing at almost 33 percent per year for three years, making up 18-29 percent of the total exports. Meanwhile, garment-textile has stayed at about 20 percent of all exports.
Overall, FDI doubled from 2012 to 2014, compared with the previous three years. Japan and the Republic of Korea each contributed about 22 percent, Singapore 16 percent, China and Hong Kong 13 percent, and China ’s Taiwan 7.5 percent.
Australia’s own trade with Vietnam soared 35 percent in 2014 to 8 billion AUD (equivalent to 5.7 billion USD) though investment in the Southeast Asian country has only reached a modest 1.2 billion AUD (0.7 billion USD).
The size of the workforce in Vietnam which has a population of 91 million is an important element, S&P said, attributing the productivity to the provision of new-cutting edge equipment.
The World Bank estimates that Vietnam’s working-age population will keep growing to 2030, whereas China’s is starting to decline.
According to the Singapore-based business analysing agency IMA Asia, Vietnam is set to gain more than any of the other 11 members from the Trans-Pacific Partnership (TPP) agreement through lower import tariffs on its branded exports.
Vietnam is likely to grow 6.2 percent and 6.4 percent in 2015 and 2016 respectively, IMA Asia forecasts.-VNA
