According to Standard Chartered’s Global Research report released in Ho Chi Minh City on January 27, Vietnam would become the second fastest-growing economy in Asia in 2016, after India only.

Standard Chartered Bank expects Vietnam’s GDP growth to accelerate to 6.9% in 2016, higher than its previous forecast of 6.6%.

The report updates that the country is moving onwards and upwards although global growth is likely to remain flat at 2.9% in 2016.

The report pointed out that consumption is likely to remain the biggest growth driver in 2016, closely followed by investment. The bank forecast that the contribution from investment to growth will be stronger than in 2015 as implemented FDI continues to increase this year, reaching a record high of roughly $23 billion last year.

“We believe Vietnam is an attractive destination for investment, a view echoed by our clients, and we expect strong FDI inflows in 2016 as well,” said Nirukt Sapru, CEO of Standard Chartered Bank Vietnam.

Commentary 

The increased FDI into Vietnam mainly come from the regional neighbours, such as Thailand, South Korea and Japan.  Economists said that Vietnam should further improve its business environment and enhance labour productivity to take advantage of current capital flow tendencies. 

This could lead to the trend of increasing cooperation in the education sector between Vietnam and respective investing countries to meet the labour demand of their businesses and industries in Vietnam.

Sources

VOV News
Saigon Times 
Vietnam News