Vietnam’s economy, the fastest-growing in Southeast Asia

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Hanoi, Oct 7 (Latin Press) Vietnam’s economy is today the fastest growing in Southeast Asia and the trend will continue in the coming years despite the instabilities of regional and global trade, agree international organizations.

Experts from various banks and rating agencies base their forecasts on the sustained growth of the Gross Domestic Product (GDP) in the last decade (an average of more than six percent), but above all on the records of 2019.

The Vietnamese economy grew 6.98 percent from January to the end of September, a record for a period of this duration in the last nine years. And it did so in a growing way: in the first quarter it expanded 6.73 percent; in the second, 6.82 percent; and in the third, 7.31 percent.
Faced with such figures, the U.S.-based Citigroup, the world’s largest financial services company, adjusted its forecast for the Indochinese nation’s GDP for this year from 6.7 percent to 6.9 percent.

Important entities in neighboring Singapore also made optimistic predictions: United Overseas raised it to 6.8 percent and Maybank Kim Eng Research to seven, while the consulting firm Capital Economics kept it at the highest of those levels.

Shortly before the spectacular end of September, other institutions gave Vietnam’s economy outstanding ratings. The Asian Development Bank, for example, predicted growth of 6.8 percent. At this time he’s probably considering raising his grade.

Individual predictions are also auspicious. Edward Lee, head of Standard Chartered Vietnam’s economic research group in Southeast and South Asia, estimated that Vietnam’s GDP will increase 6.9 percent in 2019 and maintain an upward trend until 2021.

Most specialized agencies base such calculations on the growing flow of foreign direct investment (FDI) to Vietnam, the sustained growth of exports, the strength of the processing and manufacturing industry and the steady rise in domestic consumption, among several factors.
Other elements, of course, act against or are a box of surprises.

Among the domestic ones are lower growth in industrial production compared to 2018; the slowdown in the arrival of foreign tourists; defaults in the disbursement of public investment capital; and default in the liquidation of loans.

Also, the impact of climate change (drought in several areas of the country), the fall in international prices of several key items such as rice and coffee, and an epidemic of African swine fever that has forced the slaughter of about 15 percent of the national herd of pigs.

Among the external ones, there is the issue of the trade war between the United States. At the beginning of the war, most experts thought that Vietnam would fish in a rough river, but at this time few know if it has really won anything, and less those who know if it will win or lose in the future.

The Vietnamese economy, however, is healing in health.

A few days ago, in his usual monthly meeting with the cabinet, Prime Minister Nguyen Xuan Phuc urged to apply rigorously and creatively the reforms underway to prevent the country from external and internal contingencies.

Xuan Phuc agreed that the main macroeconomic indicators show a remarkable behavior, but warned that the unstable international scenario and the aforementioned factors of domestic nature could compromise the year.

With regard to protectionist policies and tariff conflicts between the major powers, he urged the officials and bodies concerned to closely monitor eventualities, evaluate them comprehensively to determine the impact on Vietnam and advise on measures capable of counteracting them.

With regard to internal shortcomings, he called on the authorities at all levels to rigorously implement the economic reforms in which the country is engaged, and to adjust them when specific situations so require. Ministers and heads of sectors have a great responsibility in this work, he remarked.

Delineated and ruled by the Communist Party, in the Indochinese nation the policy of renewal, or Doi Moi, has been underway since 1986, according to which the country follows a market economy model oriented towards socialism.

In its shadow, Vietnam has largely healed from the wounds of war and underdeveloped, became a developing country and middle income.
Built on the ruins of successive and devastating wars, the Vietnamese economy is emerging as proof that there are alternatives to the capitalist model. And that socialism is viable when it is built under unprejudiced and creative guidelines.
(Taken from PL in Spanish)

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