VIET NAM FORECAST TO BECOME SECOND-LARGEST ECONOMY IN SOUTHEAST ASIA BY 2036

Viet Nam will become second-largest economy in Southeast Asia by 2036, according to experts.

2023 is predicted to be the year of many challenges for the Vietnamese economy due to the gloomy outlook of the global economy and multiple crises.

However, with many positive signals and prepared efforts in advance, Viet Nam's economy is still expected to maintain a good growth momentum compared to other economies in the region and the world. The international press has had many remarkable articles related to this topic.

According to Forbes, Viet Nam can be the most interesting macroeconomic and investment story in 2023.

Besides, the recently released World Bank's Global Economic Prospects Report said that 2023 was the second year the global economy has suffered severe decline, predicted to grow at only 1.7 percent.

In that context, Viet Nam is forecasted to grow at 6.3 percent, becoming the second fastest-growing economy in the region. At the same time, it is recommended that Viet Nam should proactively respond to immediate challenges.

World Bank (WB) Lead Country Economist and Program Leader for Equitable Growth, Finance and Institutions in Viet Nam Andrea Coppola suggested that the State Bank of Viet Nam should consider operating the exchange rate more flexibly to deal with the pressure of the exchange rate.

If this leads to increased inflation, the central bank may consider using the reference interest rate tool. In the medium term, Viet Nam can modernize its monetary policy by promoting a gradual transition to an inflation-targeting mechanism.

According to The Star, although Viet Nam's economy is forecasted to face headwinds in 2023, there are still bright spots for hope.

Several factors motivate the economy to grow, such as the reopening of China, helping Viet Nam boost exports and develop tourism. Additionally, Viet Nam has stepped up public investment and domestic consumption to offset the drop in exports.

Most importantly, in the context of many challenges, Viet Nam is still an attractive destination for foreign investment.

The Viet Nam Briefing page and the STAT Trade Times page give reasons why Viet Nam can become Asia's next industrial hotspot, such as competitive advantages in terms of young and skilled workers, an open FDI environment, and expansion of trade with many countries.

Source: VCCI