Vietnam forecast to be among fastest-growing countries in next decade: Harvard growth lab

Vietnam is forecast to be among the fastest-growing economies towards 2030. (Photo: VNA)

New York (VNA) – Vietnam is forecast to be among the fastest-growing economies towards 2030, according to researchers at the Growth Lab at Harvard University who presented new growth projections in The Atlas of Economic Complexity.

Specifically, the research finds that countries that have diversified their production into more complex sectors, like Vietnam and China, are those who will experience the fastest growth in the coming decade.

It predicts that when the effects of the COVID-19 pandemic dissipate, long-term growth will take off between Asia, Eastern Europe and East Africa.

The Growth Lab researchers also released new country rankings of the Economic Complexity Index (ECI), which captures the diversity and sophistication of the productive capabilities embedded in the exports of each country.

Despite the trade disruption of the pandemic, countries’ economic complexity rankings remain remarkably stable. The ECI ranking finds the most complex countries in the world held steady with, in order, Japan, Switzerland, Germany, the Republic of Korea, and Singapore at the top.

The developing economies that have made the greatest strides in improving their complexity include Vietnam (51st), Cambodia (72nd), Laos (89th) and Ethiopia (97th).

Several Asian economies already hold the necessary economic complexity to drive the fastest growth over the coming decade, led by China, Cambodia, Vietnam, Indonesia, Malaysia and India. In East Africa, several economies are expected to experience rapid growth, though driven more by population growth than gains in economic complexity, which include Uganda, Tanzania and Mozambique.

On a per capita basis, Eastern Europe holds strong growth potential for its continued advances in economic complexity, with Georgia, Lithuania, Belarus, Armenia, Latvia, Bosnia, Romania and Albania all ranking in the projected top 15 economies on a per capita basis.

Vietnam enjoyed a trade surplus of 764 million USD in the first seven months of 2022, the General Statistics Office (GSO) reported on July 29.

The country’s export-import turnover in Jan. – July reached an estimated 431.94 billion USD, up 14.8% year-on-year, the office said.

According to GSO, the country earned 216.35 billion USD from exports, while spending 215.59 billion USD on buying goods from abroad, representing year-on-year increases of 16.1% and 13.6%, respectively.

In the period, there were 30 export commodities recording over-1-billion USD turnover, accounting for 91.9% of the total export value.

The index of industrial production posted a year-on-year rise of 8.8 percent in the first seven months of this year, higher than the rise of 7.6% in the same period last year.

The July consumer price index (CPI) grew 0.4% from the previous month, contributing to the year-on-year growth of 2.54% in the first seven months of 2022, the office said.

Notably, FDI disbursement in Vietnam reached 11.57 billion USD in the first seven months of this year, up 10.2% compared to the same period last year and over 1.3 percentage point against the first half of this year.

The country raked in 15.41 billion USD in FDI during the period, a year-on-year decline of 7.1%, according to the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment.

Newly-registered investment totalled 5.27 billion USD, down 43.5% year-on-year. In contrast, extra capital injected into existing projects surged by 59.3% to 7.24 billion USD; and capital contributions and share purchases advanced 25.7% to 2.58 billion USD.

Newly-licensed capital has yet to rebound after disruption caused by the COVID-19 control measures, explained FIA Director Do Nhat Hoang. Meanwhile, many major projects have received additional investment, he said, adding that the extra capital accounted for up to 62.6% of the seven-month FDI.

The FIA also announced that processing and manufacturing lured the largest share of FDI, more than 10 billion USD, accounting for 64.3% of the total. The real estate came second with over 3.21 billion USD, or close to 20.7%.

Singapore led the 88 countries and territories investing in Vietnam with 4.3 billion USD, making up 27.7% of the total FDI. It was followed by the Republic of Korea with 3.26 billion USD, equivalent to 21%./.