Vietnam’s Economy Will Grow The Fastest In Southeast Asia This Year

Vietnam Central Park
Vinhomes Central Park and Landmark 81, Vietnam's tallest building are seen from the Saigon river in Ho Chi Minh city, Vietnam June 6, 2019. (Photo: REUTERS/Yen Duong)

The Vietnamese economy is expected to grow at the fastest rate in all of Southeast Asia this year due to increased foreign direct investments (FDI) and a massive boost in the manufacturing sector.

According to Vietnam Plus, the Chartered Accountants in England and Wales's Economic Insight: Southeast Asia report, Vietnam is expected to expand by around 6.7 percent in 2019 - a forecast that is the fastest so far in the entire Southeast Asian region.

The key players in Vietnam's economic boost our manufacturing activities and FDIs expected to increase as more companies set their eyes on the country for operations.

The Vietnamese Foreign Investment Agency also revealed that FDIs saw a hike of 9.8 percent, accounting for around $2.6 billion in investment inflows. Among various sectors in the country, manufacturing received the biggest attention from investors who sought for other markets outside China and the United States.

Despite bullish forecasts on the Vietnamese economy, other experts indicated that the country should continue improving its business environment and foreign policies to maintain the flow of investments.

Among the stumbling blocks that Vietnam has to overcome are educational restraints that could result in low skills among workers as well as low productivity in manufacturing segments. The latter is especially encouraged since investors are particularly interested in the country's manufacturing sector.

Some economists also recommended improvements in the country's digital economy. However, Vietnam has yet to establish clear and solid targets to encourage digitization in various sectors.

Many Vietnamese citizens have low Internet skills and are unaware of the latest changes in technologies that could help improve business operations. Industry experts said the legal system around digital segments should be improved as a way of raising awareness about innovations.

For digital economy analysts, awareness among citizens plus reforms in the business tech sector could help Vietnam become a globally competitive country. This is especially true as if it wants to keep its position as a recognized winner in the China-U.S. trade war.

Late last month, the DBS Bank in Singapore is fast becoming an Asian tiger amid global trade uncertainties and increased tensions among world governments. The country's economy was boosted last month by the electronics segment.

This year, it is expected that electronic investments will surge further as companies such as Microsoft, LG, and Samsung have expanded in Vietnam. The country is one in the ASEAN region that plays a major role in the world's manufacturing supply chain.

Singaporean companies and banks have been urged to improve ties and bilateral trade with Vietnamese counterparts as a means of leveraging of the growth of what could be the next Asian tiger.

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