30.11.2022, 23:56

Three factors help Vietnam’s economy grow stably

According to website vietnam-briefing.com, investment in infrastructure, commercial environment and competitive wages are the three main factors that help Vietnam’s economy grow steadily.

In terms of infrastructure investment, Vietnam has invested about 6% of its gross domestic product (GDP) in infrastructure – one of the highest levels of investment in the ASEAN region. In this expenditure, there are some major investment items such as the North-South expressway from Hanoi to Ho Chi Minh City; Long Thanh international airport to replace the overloaded Tan Son Nhat airport; tram projects in Hanoi and Ho Chi Minh City as well as thermal and waste power plants…

Regarding the commercial environment, over the years, Vietnam has actively signed bilateral trade agreements with countries around the world. As an ASEAN member, Vietnam participates in a number of free trade agreements (FTAs) that the bloc has signed, creating conditions to develop into a production center and expand its export network. The FTA between the European Union (EU) and Vietnam (EVFTA) has helped boost Vietnam’s exports despite the COVID-19 pandemic, the UK-Vietnam FTA (UKVFTA) helps two-way trade turnover in 2021 nearly 6.6 billion USD. Meanwhile, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)… helps boost Vietnam’s trade by increasing exports to Canada and Mexico.

In addition, Vietnam’s open business environment, the government’s many investor-friendly policies to attract investment and socio-economic development are also important factors to attract investment to Vietnam. According to the European Chamber of Commerce, increased FDI into Vietnam is also boosting the country’s economic growth thanks to Vietnam’s trade and labor environment, even though factories are not operating due to reduced demand in Western markets, from textiles to footwear to furniture.

One of Vietnam’s biggest advantages is its competitive salary. Vietnam’s young workforce is quite abundant with more than 40% of Vietnamese students graduating from universities majoring in science and engineering. As Vietnam has economic growth, wages will also increase. Therefore, Vietnam will have to maintain a balance between inflation, wages and productivity to avoid disrupting the overall labor market.

Therefore, website vietnam-briefing.com commented that Vietnam’s economic outlook remains promising even if geopolitical tensions persist. In the short term, costs may add up, but long-term investors will reap huge rewards.

@ Cafef