VIETNAM’s ECONOMIC OUTLOOK
Vietnam is one of the countries with superior economic accomplishment in Southeast Asia. The country has a stable base with ideal population criteria, positive income distribution and young labor force compared with other countries. As Vietnam owns the competitive advantages and potential market as well, the country is progressively becoming a notable destination for the foreign investors by its strong attraction.
In 2016, GDP was 6.21%, 2017 marked a record of economic growth, attracting foreign investment, trade turnover with the growth of 6.81%.
2018 ended with a flourish for Vietnam's economy. GDP in 2018 reached 7.08% compared with 2017 - the highest increase in 11 recent years. The quality of growth, the investment and business environment have been improved, the number of newly established businesses has increased sharply.
The macroeconomic foundation has been strengthened and gradually enhanced. Then all those figures reflect Vietnam's outstanding economic performance and major developments are in prospect for the country.
WTO AND FTAs
The level of openness of the Vietnam economy is one of the highest in the world, for which the sum of exports and imports in as per GDP is around 200% and counting - a magnificent signal of participating in 17 FTAs by 2019.
By 2007, Vietnam was contracting parties of only two FTAs: ASEAN-China and ASEAN-Korea. At that time, Vietnam signed an FTA with ASEAN membership. Then, Vietnam has actively integrated into the international economic system, including joining the World Trade Organization (WTO) in 2007 and signing a series of free trade agreements as a measure to strengthen domestic change. Afterward, a succession of FTAs signed increased significantly, such as FTAs with Japan and Chile.
Entering into such deals have helped Vietnam become more deeply integrated in the global value chain.
Especially, 2018 is considered a "bumper" year of FTAs when Vietnam’s National Assembly ratified Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and European Commission unanimously agreed to submit EVFTA to European Council. At the time, Vietnam concluded FTAs negotiations with Korea as well.
In 2019, even without the US, CPTPP will contribute to the Vietnam’s economy and trade and lead to numerous institutional reforms such as labor reforms, improving regulations, introducing administrative reforms. Vietnam's political stability, low labor costs, tax and investment preferential conditions together with FTAs that have made Vietnam emerge as a potential exporter to developed markets.
OPPORTUNITIES OF INVESTING IN VIETNAM
Vietnam has attracted a large amount of foreign direct investment (FDI) up to 2017. Following the below chart of total registered capital from top 4 investment countries, there is a considerable rise of foreign investment capital over a course of 7 years starting from 2011. For instance, in 2011, Korean investors who are the second on top of the most contribution countries in Vietnam registered 23,695.9 USD million. After 7 years, the number increased up 57,861.7 USD million, become the highest. Similarly, total registered capital contributed the other countries increased year on year.
From the beginning of 2018 to September 2018, Vietnam recorded 3,046 new licensing projects with a registered capital of US $ 17,976.2 million, an increase of 17.6% in number of projects and a decrease of 15,5% of registered capital compared with the same period in 2017. Besides, there are 1,169 licensed projects from previous years registered to adjust investment capital with an additional capital of USD 7,596.7 million, reducing 9.7% compared with the same period last year.
CHANGES IN DOMESTIC POLICIES AND REGULATIONS
Vietnam, with loads of positive factors, becomes an magnetic place for investors from all over the world spreading the business network and taking advantage of inherent strengths of sources with low costs.