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Vietnam economy shows bright spots in international looks

Wed, 08 Apr 2015. Last updated Mon, 01 Jun 2015 14:26

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Vietnam economy in 2015 is predicted to develop strongly. With great achievements in the first quarter, Vietnam is highly appreciated by international organizations such as Bloomberg, Economist Intelligence Unit, HSBC or ASEAN Stats.

Production recovery, high GDP growth rate, smaller per capita income gap between ASEAN countries... are great achievements of Vietnam economy. In late March, The General Statistic Office released the Vietnam GDP in the first quarter 2015 increasing by 6.3%, much higher than that in 2014 and expectation. According to the assessment of GSO, the impressive increase was supported by the recovery of industrial production. The prospect of Vietnam economic growth in the first quarter was highly and positively appreciated by many international organizations.

 

Production line in AFC factory

 

According to Bloomberg, the list of Asian countries having a “vibrant” production is not just China, South Korea and Thailand, but also Vietnam. Specifically, Bloomberg showed the statistics of HSBC and Markit Economics that PMI of Vietnam production industry continued to increase and reached over 50 points since August 2013 up until now. This is the highest point among Asian countries which are followed by HSBC and Markit Economics. Meanwhile, the PMI of China decreased during the time. As of January 2015, Thailand production industry also fell in 22 months. One of the strengths helping Vietnam appeal foreign investors is low wage costs. As reported by the International Labour Organization (ILO), in 2013, the average monthly wage in Vietnam is 197 USD, less than that of Thailand (391 USD) andthat of China (613 USD). Earlier, Bloomberg also made the comment on Vietnam economy that is emerging in Asia as an ideal investment destination with the advantage of a young workforce and impressive growth. The new agency said that big corporations as Samsung, Intel, and LG are important Foreign investors in Vietnam, making the country become the next "tiger" in Asia.

 

Samsung Vietnam factory

 

In early April, Economist Intelligence Unit under The Economist magazine released a report about the newly emerging rich people in the world. These individuals have an average assets from US $100,000 to 2 million. Among those, Vietnam is predicted as the third country in Asia - Pacific having fastest rich people growth during 2014 - 2020 after India and Indonesia. EIU said that Vietnam would have 347 well-off people in 2020, increasing nearly 35%, in comparison with that in 2014 (57 people). The total asset of the group after 5 year will reach US $68 million, equal to US $196 thousand each. The report also pointed out bright prospects of economy in Vietnam in 2015. For example, Vietnam will be an attractive destination for newly emerging rich group in the next 20 years, based on stable increase in income and expenditure of people, stable policies of the government.

In the report on Macroeconomics - Vietnam Macroeconomic Prospects, HSBC said, on the surface, the economy of Vietnam in 2015 started with a powerful position. Manufacturing sector grew by 9.5% compared to that in the same period last year, while the service sector also saw a significant increase of 5.8%. The Vietnam GDP growth rate in the first quarter 2015 increases by 6.03% compared to that of 2014, reflecting relatively stable rate during the 3 months. However, banking is warned by external conditions which are getting worse, and putting pressure on foreign currency in Vietnam. Export, although increased higher than the regional standard in the first quarter, it fell to 6.4%, compared to the same period last year.

 

Countries in ASEAN community

 

According to ASEAN Stats, the scale of of current economy in Vietnam is quite lower than that of other countries in ASEAN. However, the gap is increasingly smaller in recent years. The scale of Vietnam GDP in 2005 was just a third of Thailand, nearly a half of Singapore, and nearly one fifth of Indonesia. In 2013, the figure was improved significantly: a half of Thailand and over a half of Singapore. ASEAN Stats said that, during high developing countries as Brunei, Singapore, Thailand and Malaysia are dealing with difficulties due to economic crisis and low GDP growth rates, Vietnam remains its relative growth rate and ranks 6th in the region, after Laos, Cambodia, Philippines, and Myanmar. Vietnam joined medium-income countries, with GDP per capita rises over years. In 2013, Vietnam GPD per capita increased to 9.1%.

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