Lender HSBC has raised Vietnam’s growth forecast to 7.6% this year thanks to the country’s broad-based recovery and significant improvement in the manufacturing sector.
“Vietnam’s manufacture conditions have been improved significantly, following the ASEAN’s improvement trend, signaling a solid improvement in the health of the manufacturing sector,” said HSBC Vietnam CEO Tim Evans at a forum Tuesday.
The country registered an 11-year high growth rate of 8.83% in the first nine months. Due to broad-based recovery, full reopening, and domestic demand being back on track, manufacturing and exports continue to soar, he added.
Echoing him, Alain Cany, EuroCham chairman, said that growth prospects remain high for Vietnam with the World Bank pegging it at 7.2% this year compared to the global rate of 2.8%.
“While global uncertainty persists, Vietnam’s prospects are reassuring.”
Export-oriented manufacturing and inbound foreign direct investment are driving Vietnam’s economic growth, and considering Vietnam’s high-quality and affordable labor offerings, it’s no surprise that foreign investors want to move manufacturing operations here, Cany said.
EuroCham-member LEGO is investing $1 billion in Binh Duong to build its forward-looking first factory in Vietnam and its second in Asia. Apple supplier Pegatron now plans to invest up to $1 billion here. Foxconn committed $300 million to upgrade its Bac Giang manufacturing facility.
To attract even more FDI, Vietnam needs to make business simpler, and it is an absolute necessity that Vietnam’s legal framework, administrative procedures, and business incentives are given high priority, Cany said.
Public and private investors need to accelerate the green transition as Vietnam is highly vulnerable to climate change with more than three thousand kilometers of coastline.
“FDI is ready and able to help. It is my hope that the government will further streamline administrative procedures and develop a comprehensive legal framework so that FDI companies can make a greater contribution.”
Cany also said that to develop Vietnam in all key areas – green transformation, improved infrastructure, digital development, moving up the global value chain in export-oriented manufacturing, and so on – public and private sectors must come together to boost Vietnam’s human resource capacity.
“The government must focus on upskilling its workers to enhance their capabilities. The private sector has a huge role to play as well. By sharing knowledge and implementing talent development initiatives, we should develop Vietnam’s workforce to the fullest possible extent.”
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