Vietnam showing better-than-average growth: Indian expert

Vietnam is said to have been avoiding the usual recessionary trends across the Asian markets and is showing better-than-average growth. (Photo: VNA)

New Delhi - An Indian expert has highly valued Vietnam’s post-pandemic recovery in an article recently published on Moderndiplomacy.eu.

In the writing, titled “Vietnam’s macroeconomic policy and post COVID recovery”, Prof. Pankaj Jha, Director of the Centre for Security studies at India’s Jindal School of International Affairs, cited the latest IMF reports as saying that Vietnam's real gross domestic product (GDP) in 2023 is estimated at 6.2%, and this clearly indicates Vietnam has been avoiding the usual recessionary trends across the Asian markets and is showing better-than-average growth.

He noted with an inflation rate of less than 4%, it clearly shows that Vietnam is likely to emerge as a promising economy in Asia.

If one looks into the core fundamentals of Vietnam following the COVID-19 pandemic, it has been clearly stated that Vietnam’s annual economic growth rate hovered between 6.3% and 6.5% for the decade preceding the current one.

One of the major aspects of this better-than-average economic growth was high foreign direct investment, increased domestic consumption, sizeable increase in the middle class, and Vietnam’s focus on promoting its manufacturing to be export-oriented.

In terms of other critical aspects, the country has been securing loans from many other international agencies over the past few years. With funding and grants from different international economic agencies, it has been able to upgrade its road, rail transport and border connectivity infrastructure along with promoting socio-economic growth across provinces, according to the article.

It added over a period of time, Vietnam has been making serious efforts in emerging as a knowledge network society. This includes improving policy applications, enhancing capacities of stakeholders, and providing information to the communities on a regular basis. Vietnam has also received more than 2 million USD grant for climate resilient inclusive infrastructure through high technology fund from the Asian Development Bank (ADB). In terms of meeting UN sustainable development goals, it has successfully provided electricity to its population.

Two different aspects have gained international attention are Vietnam’s ranking of 70th out of 190 countries in terms of ease of doing business, and its major strength being a young population with nearly 70% aged 15 - 64.

The tourism sector is going to increase further given the fact that the country has signed a comprehensive agreement in boosting sustainable tourism and post-COVID recovery at the national level. During 2022 - 2025, the cumulative average tourism growth rate is expected at 13.5% on average each year, the Indian expert went on.

The transformation is also happening in terms of fiscal and monetary prudence as well as undertaking reforms within the banking system and financial governance. The anti-corruption drive that the Vietnam has undertaken in the last few years has built the investor confidence, and it is expected that Vietnam will reap the pidends of a better business environment, market connectivity, and relatively comparative advantages among other competitors in Southeast Asia.

As expected, the fundamentals are getting stronger, and therefore Vietnam can witness stronger economic growth and better macroeconomic stability in 2023, he added.

Vietnam must revisit policies to develop implementation of global minimum tax Countries that have outbound and inbound investment activities have been making drastic moves in considering policies related to the global minimum tax (GMT). If Vietnam does not take immediate action or delays implementing it, it may miss the opportunity to have the right to tax and may be left behind in attracting foreign investment.

Vietnam can enhance its role further within ASEAN With Indonesia holding the ASEAN Chairmanship in 2023, the ASEAN Business Advisory Council Indonesia had a 2-day visit to Vietnam last week. Arsjad Rasjid, chairman of ASEAN BAC 2023, talked with VIR’s Thuy Dinh about how Vietnam and Indonesia to jointly bolster trade within the region and between both nations.