Over the medium-term outlook for the next five years, a number of key drivers are expected to continue to make Vietnam one of the fastest growing emerging markets in the Asian region. (Photo: Getty Image)

Over the medium-term outlook for the next five years, a number of key drivers are expected to continue to make Vietnam one of the fastest growing emerging markets in the Asian region, said an article published by the S&P Global Market Intelligence on October 5.

Accordingly, it noted that Vietnam will continue to benefit from its relatively lower manufacturing wage costs. The country has a relatively large, well-educated labour force compared to many other regional competitors in Southeast Asia, making it an attractive hub for manufacturing production by multinationals.

In addition, rapid growth in capital expenditure is expected, reflecting continued strong foreign direct investment by foreign multinationals as well as domestic infrastructure spending. Strong investment is expected in infrastructure sector over the next decade.

The article assessed that many multinationals have been diversifying their manufacturing supply chains during the past decade to reduce vulnerability to supply disruptions and geopolitical events. Vietnam has been one of the preferred destinations for Republic of Korea and Japanese firms choosing to shift their production to the ASEAN region.

In conclusion, the author wrote over the medium-term economic outlook, a large number of positive growth drivers are creating favourable tailwinds and will continue to underpin the rapid growth of Vietnam's economy. This is expected to drive strong growth in the country’s total GDP as well as per capita GDP. The economic outlook from 2024 to 2026 is for rapid economic expansion.

With strong economic expansion projected over the next decade, Vietnam's total GDP is forecast to increase from 410 billion USD in 2022 to 500 billion USD by 2025, rising to 750 billion USD by 2030. This translates to very rapid growth in Vietnam's per capita GDP, from 4,150 USD per year in 2022 to 5,000 USD per year by 2025 and 7,300 USD by 2030, resulting in substantial expansion in the size of its domestic consumer market.