Vietnam is on the cusp of robust economic growth in 2024, with various factors converging to shape its trajectory, the 16th annual Vietnam Economic Scenario Forum in Hanoi on January 11 heard.

Mr. Ahmed Yeganeh, Country Head of Wholesale Banking at HSBC Vietnam, highlighted the country’s strong foundational elements. “Vietnam is benefiting from a young and growing population with rising urbanization rates and a fast-growing middle-class,” he said. “This young and tech-savvy workforce allows it to benefit from and embrace the opportunities created by new platforms and ways of working and interacting, and to remain an attractive FDI destination.

Vietnam’s demographics remain one of the country’s strengths, he went on, given its young, entrepreneurial, and tech-savvy population of 100 million, over 73 per cent workforce participation rate, and resultingly growing urbanization rate of 38 per cent. The country’s working-age population continues to grow, by an estimated 0.4 per cent each year, unlike China, Japan, Thailand, and Singapore, who are trending negatively. This results in Vietnam’s domestic consumption being among the world’s top 10, joining the UK, Germany, Thailand, and Turkey by 2030. E-commerce has doubled, from $8 billion in 2018 to over $16 billion in 2022, and in the Vietnam E-Business Index it is forecast to grow beyond $20 billion in 2024. Vietnam also sees the highest percentage change in the number of adults with wealth over $250,000, outpacing most Asian economies. All this represents a huge opportunity for both local and international investors.

Mr. Hong Sun, President of the Korean Business Association in Vietnam, emphasized Vietnam’s current “golden population” structure, projecting it will last for approximately another 10-15 years. He highlighted the critical importance of seizing this window of opportunity for Vietnam to become a developed nation, cautioning that missing this chance could make a return to a golden population era exceedingly challenging.

Moreover, Vietnam is poised for substantial changes in the percentage of adults possessing assets exceeding $250,000, outpacing many Asian economies. This positions Vietnam as a promising consumer market for both domestic and international investors.

Associate Professor Nguyen Thuong Lang, meanwhile, highlighted the importance of the domestic market as a growth driver, particularly amid challenging export conditions. Policies aimed at boosting domestic consumption and encouraging local investment are deemed crucial.

Data has revealed signs of recovery across various sectors since last June, with varying degrees of progress. Mr. Can Van Luc, Chief Economist at the Bank for Investment and Development of Vietnam (BIDV), emphasized the role of crucial legislation such as land, housing, and real estate laws as pivotal drivers for Vietnam’s future economic development.

Ms. Dorsati Madani, Senior Economist at the World Bank (WB), delved into the economic drivers for Vietnam, emphasizing the importance of both external and domestic demand. “While expecting a moderate recovery in exports, the focus on resolving challenges in the real estate sector becomes crucial, given its impact on private investment and interconnected sectors like construction, design, and architecture,” she said.

She further highlighted the steady contribution of the agriculture and forestry sector to economic growth. To enhance this contribution, increased technology adoption, modernization, and a focus on agribusiness and productivity growth are recommended.

Mr. Hong Sun added insights into Vietnam’s robust industrial production, saying that “Post-China is Vietnam”. With China’s export share declining, Vietnam has become a major growth destination, even attracting Chinese companies relocating their production activities.

Dr. Lang also emphasized the continued importance of attracting FDI in 2024 as a potent driver of economic growth, highlighting Vietnam’s focus on attracting FDI in green and clean technologies and energy transition, and the need for updated policy frameworks aligned with global standards.

The 16th Vietnam Economic Scenario Forum brought together representatives from various government bodies, experts, international and local economic experts, investment funds, corporations, and banks. It aimed to provide independent and comprehensive assessments of Vietnam’s economic trends and practical considerations within the regional and global development context.

In analyzing current mechanisms and policies, the Forum aimed to facilitate an environment conducive to the implementation of new growth drivers in 2024. The participation and feedback from representatives of government bodies are crucial in ensuring that businesses have access to accurate and validated information to make informed decisions.