Vietnam may be one of the fastest-growing emerging markets by 2035

Vietnam may be one of the fastest-growing emerging markets by 2035. Photo: Le Toan

The S&P Global Look Forward Journal, titled "Emerging Markets: A Decisive Decade", which considers the opportunities and challenges the next decade will bring for emerging markets' economic growth in terms of energy transition, supply chain integration, and labour productivity.

Among the findings, S&P Global opine that emerging markets will play a crucial role in shaping the global economy over the next decade, averaging 4.06 per cent GDP growth through 2035, compared with 1.59 per cent for advanced economies. By 2035, emerging markets will contribute about 65 per cent of global economic growth, driven mainly by emerging economies in Asia, including China, India, Vietnam, and the Philippines.

Supply chain relocation will remain a key trend that could benefit emerging markets, including Vietnam. The country’s ties with the United States have been developing quickly, even before the pandemic. Vietnam’s exports to the US have increased fourfold since 2013 and accelerated following tariffs imposed on China in 2018. The country became the seventh-largest goods supplier to the US in 2023.

"We estimate that Vietnam could become one of the fastest-growing emerging markets by 2035, buoyed by policy consistency and a focus on reinforcing its trade potential. Vietnam’s strong presence in evolving global supply chains will be determined by sustained progress in addressing infrastructural, labour and resource constraints," the report noted.

In addition, emerging markets are also setting sector-specific objectives. Among them, Vietnam aims to secure a 10 per cent share of the world’s semiconductor market by 2030 through its National Semiconductor Industry Strategy.

The report identifies critical development needs that emerging markets face in facilitating this growth, including additional investment in adopting new technology such as AI and automation. Furthermore, emerging markets will need to adapt to new policies and extraterritorial legislation from advanced economies to secure more foreign direct investment and take advantage of favourable demographics expanding their labour force and consumer markets. Markets that produce critical minerals for the energy transition like copper, cobalt, nickel, and lithium will likely record exponential demand growth in the next 10 years, and others will benefit from global supply chain relocations.

Carlos Cardenas, head of Latin American insights and analysis for S&P Global Market Intelligence, noted that, "Despite these opportunities, emerging markets will traverse an evolving geopolitical environment marked by unresolved conflicts and other persistent disruptions. These countries must adapt to a world where policymakers, particularly within advanced economies, seem less willing to embrace limitless trade and globalisation, adding complexity to emerging markets' growth prospects."

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