April 24, 2017 22:26

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Forbes: five engines guarantee Vietnam’s economic growth in 2017

21:13 | 09/01/2017

The US magazine Forbes said Vietnam can meet its target of 6.7% GDP growth in 2017 thanks to five engines, including its resources and trade agreements with other nations.

forbes five engines guarantee vietnams economic growth in 2017

The magazine cited Oscar Mussons, international business advisory associate with the DezanShira& Associates consultancy in Ho Chi Minh City, as saying that firstly, Vietnam keeps giving foreign companies reasons to invest thanks to its lower tariffs under the trade deals and clear rules on foreign investment.

In 2017, Vietnam will start to “collect the fruits of having a more structured and competitive business legislation, which is having an impact on attracting more FDI and also helping Vietnam become one of the major manufacturing hubs in the world,” he said.

Secondly, Vietnamese are getting richer and spending more, the magazine said, noting that the country’s middle class will double by 2020 to 33 million people. Wages are rising along with a boom in jobs linked to growth in export manufacturing.

Meanwhile, factory work is moving up in value from traditional industries. Electronics are replacing traditional industries such as garments and shoes. High-tech’s share of total exports from Vietnam reached 25 percent in 2015 from 5 percent in 2010 and kept going last year with no signs of abating now.

The fourth factor is private business, which is expanding, particularly in garment and textile and export-oriented production. A boom is seen in beer and startups in media, entertainment and online payments. The localised venture capital funds also gave startups better access to funding.

Finally, Vietnam already takes part in 16 free trade agreements (FTA), including those with economic powerhouses such as China and Japan. The country is also on the list to join a Chinese-championed Regional Comprehensive Economic Partnership trading group that would encompass 30 percent of the world’s GDP.

Statistics of the Vietnam General Statistics Office showed the national economy expanded around 6.21 percent in 2016. The figure is expected to hit 6.7 percent in 2017.

Source: VOV