Vietnam living standards to rise as population growth peaks

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As the ratio of those in work compared to dependents rises, there will be increased opportunity for investment, allowing the country to enjoy a ‘demographic dividend’.

The ICAEW report ‘Economic Insight: South East Asia’ is produced by Cebr (The Centre for Economics and Business Research), ICAEW’s partner and forecaster. Commissioned by ICAEW, the report provides more than 138,000 members with a current snapshot of the region’s economic performance. The report undertakes a quarterly review of South East Asian economies, with a focus on the six largest countries of Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

The world economy has slowed this year with most BRIC nations (except Russia) and major western economies underperforming expectations.

ICAEW economic advisor and Cebr’s chief executive, Douglas McWilliams, said: “The bottom seems to have been reached for many emerging markets around the world, but with industrialised countries struggling, stabilisation is more likely than an immediate return to fast growth.”

Two key drivers of national output are productivity and the size of a country’s labour force. Though Vietnam is a popular destination for low-cost manufacturing, it is important to move up the value chain in the next few years and focus on high value-added goods as well as business and financial services to secure continued growth.

Mark Billington, regional director, ICAEW South East Asia, said: “Raising output means increasing productivity; not just in terms of quantity but also moving up to value-added knowledge and skills based goods and services. Vietnam will need to increase its pool of highly-qualified young professionals and ensure there is a strong accountancy and finance sector in order to support businesses at home and attract investment from overseas.”