The latest quarterly survey from the Financial Times Confidential Research showed that Vietnamese consumer sentiment towards the economy is at a three year high
The survey of 5,000 consumers across Thailand, Indonesia, the Philippines, Malaysia and Vietnam indicated that bullish Vietnamese consumers are spending more as a robust economy fuels growth in household incomes.
The research found young Vietnamese among the most optimistic about their country’s economic outlook, propelling the FTCR Vietnam Economic Sentiment Index to its highest level since the start of 2015.
It expected Vietnam to remain the fastest-growing of the region’s major developing economies this year. The Southeast Asian economy grew 6.8% last year, and the local government is expecting a faster pace this year.
The report also said a relatively large, young and cheap labour pool is drawing foreign investors and turning Vietnam into a regional manufacturing hub in competition with Malaysia, Thailand and Indonesia. It noted that Samsung is the largest foreign investor, having invested US$17 billion in the country since 2009. Last year, around half of all of Samsung’s high-end smartphones were made in Vietnam before being shipped worldwide.
However, the survey pointed to significant challenges facing the Vietnamese Government in sustaining economic growth amid increasing public debt and tight State budget. The year 2018 is when the country begins to realise its commitments under 16 free trade agreements, which will result in zero tariffs for a range of products, directly affecting its budget collection.