Vietnam's booming economy fuels financial services demand

July 31, 2023 | 18:22
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As Vietnam carves out its position as a dynamic emerging economy, the shifting lifestyles and escalating income levels of its citizens are creating a surge in demand for consumer goods and personal finance services. This growing appetite for personal finance planning and advisory services has thrust the sector to the forefront of strategic planning for financial institutions across the nation.
Vietnam's booming economy fuels financial services demand

Several key factors are driving this demand, closely mirroring those shaping the world's most advanced economies. Among the most influential are a swift increase in income levels, an expanding middle-class demographic, an accelerating trend towards an ageing population, and the mounting pressures on the national social insurance fund.

According to the International Monetary Fund (IMF), by 2024, Vietnam is projected to be home to the world's 35th largest GDP with a resilient economy worth almost $414 billion, positioning the country third within the ASEAN region. The IMF predicts a further dramatic leap in the country's GDP, escalating to around $570 billion, $630 billion, and $690 billion in 2025, 2026, and 2027, respectively

The IMF forecasts Vietnam's per person GDP to reach approximately $4,682 this year, growing beyond $5,000 in 2024.

Parallel to this, Vietnam's burgeoning middle class is experiencing significant growth. In a country with a population about to exceed 100 million, Vietnam finds itself in its golden population structure phase, with two working-age individuals for every one dependent-age individual. The middle class, currently 13 per cent of the population, is anticipated to double by 2026, and according to a March 2021 Statista report, is projected to breach the 50 million mark by 2030.

However, Vietnam is undergoing one of the world's most rapid ageing processes. Those aged 60 and above accounted for just under 12 per cent of the total population in 2019, but that figure is predicted to be more than 25 per cent by 2050. By 2036, Vietnam is expected to transition from an 'ageing' society to an 'aged' one.

This demographic shift is increasing pressure on the national social insurance fund. As of September 2022, over 17 million people, representing 37 per cent of the working-age population, were contributing to the fund - an increase of approximately 535,000 people since the end of 2021. However, the declining ratio of contributors to beneficiaries threatens to upset the balance of the fund's income and expenditure, potentially as early as 2035, according to the International Labour Organisation.

Against this backdrop, ensuring universal access to formal, comprehensive, and high-quality personal financial planning and advisory services is paramount for maintaining social security and propelling sustainable economic growth. The window of opportunity for financial institutions to shape the future of personal finance in Vietnam is vast, paralleled only by the potential for individuals who grasp the opportunity to assert control over their financial futures.

The 2023 Vietnam Wealth Advisor Summit - the first event in the asset management sector organised by VIR and the Vietnam Wealth Advisor community under the auspices of the Ministry of Planning and Investment is set to take place.

  • Time: 13:00-18:00, August 8, 2023
  • Location: Pullman Hotel, 40 Cat Linh, Dong Da, Hanoi

Themed 'Swimming in the Vortex', the 2023 Vietnam Wealth Advisor Summit will present prestigious domestic and international speakers in profound discussions about Vietnam and the global economy; effective investment strategies in an unpredictable environment; and the preferred investment-supporting products and services in the financial, banking, insurance, gold, foreign exchange, and real estate sectors.

The 2023 Vietnam Wealth Advisor Summit will primarily feature:

  • The main conference with esteemed Vietnamese and international speakers, presenting two sessions on 'Deciphering Variables' and 'Hunting for Opportunities'
  • Recognition of standout financial products and services in 2023
  • Honours for businesses contributing to the development of financial services
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By Tu Thuan

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