The Government News quoted Seeking Alpha (seekingalpha.com) as reporting on December 12 that Vietnam has grown into a well-diversified economy that strikes an attractive balance between export-led growth and growing domestic demand, enjoying robust exports in addition to a growing domestic consumer base.
Vietnam’s economy has expanded rapidly, outpacing its ASEAN peers and presenting a unique opportunity for investors, Seeking Alpha said, adding that this growth is underpinned by diverse sectors, from high-tech manufacturing to natural resources, and bolstered by significant trade relationships, especially with the US and China.
Vietnam’s increasing importance in global trade, however, obscures its robust domestic market, fueled by a growing middle class and favorable demographics.
Seeking Alpha, the world’s largest investing community, as it describes itself, noted that in 2022 Vietnam exported roughly $371.4 billion worth of goods and services. This figure represents a striking turnaround for a country that experienced limited economic activity and a low standard of living just 40 years ago.
Vietnam’s journey towards economic prosperity over the past few decades has been driven largely by sweeping economic reforms known as “Doi Moi”, initiated in 1986, it remarked.
These reforms marked a radical shift from a centrally-planned economy to a market-oriented economy, laying the groundwork for Vietnam’s increased exports and deeper integration into the global economy, it said.
The liberalization of trade policies under “Doi Moi” was also instrumental in attracting FDI.
Major multinational corporations were enticed to set up manufacturing and export-oriented units in the country, benefiting from its strategic location, competitive labor costs, and increasingly skilled workforce, and this led to a surge in exports, particularly in textiles, footwear, and electronics, propelling Vietnam into becoming a significant player in global supply chains, it noted.
According to Seeking Alpha, Vietnam’s accession to the WTO in 2007 marked another milestone, further integrating it into the global economy. The country has since been party to numerous free trade agreements, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EUVFTA), enhancing its export potential.
This export-led growth, in turn, has fueled domestic demand. As exports grew, so did the economy, resulting in increased incomes and a burgeoning middle class. This new wealth has translated into higher consumer spending within Vietnam, it noted, adding that the growth in domestic demand is evident in the rising consumption of goods and services, increased urbanization, and the expansion of the retail sector.
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