As the economic pressure has reduced compared to previous expectations, Vietnam's economy continues to maintain its competitiveness in terms of exports and foreign direct investment (FDI) attraction.
The information was shared at the Vietnam Economic Outlook 2023 event, held by Citi Vietnam for its corporate and institutional customers, which hosted the biggest foreign-invested enterprises and leading local companies.
The session highlighted key information on economic and investment trends and reaffirmed Citi’s commitment to supporting the growth of these companies across Vietnam, Asia, and the rest of the world.
At the event, Citi revealed its Asia-Pacific economic data update for 2023, highlighting reduced pressures for Asian economies compared to previous expectations. Global commodity prices have subsided, and China's quicker than expected reopening is expected to drive trade in services. The hawkish shift of Fed policy on inflation is unlikely to have the same influence on Asia’s monetary policy as it did last year.
According to Citi Research, Vietnam’s market share in global trade is expected to rise in the medium term.
Helmi Arman, economist at Citi Indonesia and Vietnam said, “Vietnam’s share of global trade is less than 2 per cent, but it has doubled in the past 10 years. We think this will continue to rise as multinational company supply chain diversification grows and geopolitical tensions continue.”
Domestic consumption is also expected to accelerate local economic growth in the coming years.
"Vietnam can still rely on its export-oriented growth model for years to come. But as urbanisation continues to rise and per-capita GDP climbs beyond $4000, FDI inflows could become more diversified and domestically oriented," added Helmi.
Vietnam Citi country officer Ramachandran A.S. noted that real estate and some exports sectors have been facing slowdowns since the fourth quarter of 2022, but the long-term prospects for Vietnam are unmistakably strong. He believes that Vietnam has a competitive advantage in attracting FDI and highlighted Citi’s leading role in supporting the flow of investments into the country.
“Our 95-country presence is unique, unparalleled, and impossible to replicate. Therefore, through our network, we bring the world to Vietnam and take Vietnam to all parts of the world. For instance, we have financed a Vietnamese company in Peru, and we are banking a large Latin American fintech in Vietnam. We facilitate numerous such cases across the globe,” said Ramachandran.
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By Thanh Van