Asia House: Vietnam's Economy Will Achieve Outstanding Achievements in 2024

Asia House Annual Outlook 2024 assesses that Vietnam's economy is likely to continue to grow significantly compared to its regional neighbors in 2024, with its manufacturing and export industries drawing significant inward investment, giving the openness of the economy and the strength of its fundamentals.
January 30, 2024 | 13:44
Asia House: Vietnam's Economy Will Achieve Outstanding Achievements in 2024
Container warehouse at Tan Vu port (Hai Phong). Photo: vimc

The Annual Outlook 2024 was released by Asia House on January 23, assessing the prospects of eight key economies in Asia, including China, India, Japan, Indonesia, Vietnam, Malaysia, Thailand and Philippines. The report says that Vietnam and the Philippines will be two countries with outstanding achievements this year.

According to the report, in the first 10 months of 2023, capital for implementing foreign direct investment (FDI) projects in Vietnam reached about US$18 billion, equivalent to 73% of total registered FDI capital in the same period.

More foreign investors are coming to Vietnam to diversify the supply chain.

The report assesses Vietnam as having a thriving technology startup environment and significant public investment in artificial intelligence (AI) with a digital transformation program aimed at turning domestic technology companies into global players.

The National Innovation Center supports tech breakthroughs in multiple sectors, while the banking sector is active in AI testing and application. VPBank applied Al in currency transactions, personal credit and digital banking, while Vietcombank has cooperated with FTP Smart Cloud to develop a customer chatbot platform, called VCB Digibot.

Vietnam is also a leading country in blockchain projects with more than 200 active blockchain projects. Vietnam deployed blockchain technology in a number of areas such as credit guarantees in trade and supply chain finance.

The report states that Vietnam will continue to leverage blockchain technology to improve the efficiency of the logistics industry, especially focusing on companies in Ho Chi Minh City.

The Make in Vietnam program, in which homegrown businesses manufacture globally competitive products, will scale growth in multiple sectors. A strong labor market (69% of the population are of working age) will aid this growth.

The report also predicts that in 2024, AI will reshape many sectors of the Vietnamese economy and promote foreign investment in the manufacturing sector. By partnering with educational institutions and participating in the development of AI infrastructure, foreign investment can create positive economic spillovers.

The report points out that as a major agricultural producer, Vietnam will benefit from effective investment in agriculture, using AI technology to monitor and analyze, optimize productivity and fertilizer use.

AI can also be used to collect data on soil conditions, weather, crop growth and water use, while sensors and drones can also provide important data, helps make decisions about seeding, fertilization, pest management, and other agronomic processes.

Asia House: Vietnam's Economy Will Achieve Outstanding Achievements in 2024
Illustrative image (Photo: VNA)

Incentive policies to encourage the transition to a green economy will be a key factor in 2024, and the following years in Vietnam.

Continuing to promote and expand incentives to attract and allocate green finance, with the participation of domestic financial institutions, will accelerate Vietnam's energy transition, and help build resilience to climate shocks.

The Bank for Investment and Development of Vietnam became the first bank to issue green bonds with the proceeds used to finance green, energy-saving, emission-reducing, and environmental protection projects.

This was the first domestic green bond issuance in the Vietnamese capital market scored by Moody's. Additional efforts to scale green bond issuance will create pathways for more issuance and deliver more depth and breadth in the green ecosystem.

Assessing the Asian economic outlook in 2024, the report states that in the context of geopolitical instability, conflict and climate change, Asian economies will be the driving force for global growth in this year, thanks to growth in regional trade, advances in digital technology, and green finance.

As the world struggles with modest growth, weak trade and falling business and consumer confidence, Asia will once again buck the global trend with economic growth at around 5%.

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