New position of Vietnam's economy globally

In the last days of 2023, the report of Fitch Ratings (USA) further strengthened the hope for the new position of Vietnam's economy globally.

The outlook for Vietnam's economy is quite solid and Vietnam remains an attractive destination for foreign investors. (Source: Getty Image)

Vietnam has been upgraded to ‘BB+’ on the basis of favourable medium-term growth prospects supported by strong foreign direct investment (FDI) inflows, which Fitch believes will help improve Vietnam’s credit profile.

In 2022, Vietnam's realized FDI capital will be 22.4 billion USD (about 6% of GDP), up from 19.7 billion USD in 2021. Realized FDI capital up to November 2023 is 20.2 billion USD. Foreign financial resources flowing into Vietnam are also highly appreciated, when foreign exchange reserves as of the end of September 2023 reached 89 billion USD, after a sharp decrease in 2022.

According to many independent assessments, Vietnam is competitive in terms of costs, has a skilled workforce compared to other countries, and is present in many free trade agreements (FTAs), both regionally and globally. These are positive signals showing that FDI inflows will continue to increase, especially in the context of Vietnam participating in the diversification of global supply chains.

According to Fitch's forecast, Vietnam's medium-term growth has favorable signals, at around 7%.

Recently, in the World Economic Outlook Report, the Center for Economics and Business Research (CEBR - UK) also predicted that the size of Vietnam's economy will have a leap in the next 14 years. The Center assessed that Vietnam's economy will be the 34th largest in 2023 with a GDP of 430 billion USD and could enter the global Top 25 by 2038.

Fitch believes that these obstacles are unlikely to affect the macroeconomic outlook in the medium term, as Vietnam’s policy “buffer” is capable of managing short-term risks, helping the economy overcome internal difficulties while harmonizing development goals when external demand weakens.

CEBR also assessed that Vietnam benefits from the shift in the global supply chain. Vietnam has improved its ranking thanks to repositioning its position in the global value chain, to reform internally, increase labor productivity, and increase public and private investment. Strong FDI flows from economies around the world, especially from leading "capital sources" such as the US, China, Japan, Singapore, the EU, etc., are strengthening Vietnam's development potential. In addition, according to CEBR, by taking advantage of its large and young population, Vietnam has the opportunity to surpass almost all ASEAN countries and become a high-income country by 2045.

Vietnam is currently a member of large-scale trade agreements, including the Comprehensive and Progressive Agreement for Trans- Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP). In 2023, after a series of signed agreements, Vietnam's leading partners now include the US, China, Japan, India, South Korea and Russia...

By listing Vietnam's most important diplomatic events in the past 12 months, the world's leading news agency Reuters commented, "Vietnam is the region's leading manufacturing country, increasingly becoming a strategic country in the global supply chain."

Source: https://baoquocte.vn/vi-tri-moi-cua-kinh-te-viet-nam-tren-toan-cau-256159.html