Vietnam is considered a 'Rising Star' to become an emerging market

On June 21, portfolio-adviser.com (UK) published an article stating that Vietnam, one of the fastest growing economies in Asia, may be promoted from a frontier market.

According to the article, Vietnam has recorded high GDP growth for many years, thanks to political stability and the government's orientation towards healthy market development. Vietnam has succeeded in reducing the poverty rate from 17% to below 5% in the past decade.

The most prominent growth driver for Vietnam is said to be a sharp increase in foreign direct investment (FDI), benefiting from increased exports due to the China +1 strategy. Vietnam continued to sign more than 10 important trade agreements during the COVID-19 lockdown. These partnerships make it easier for companies in Vietnam to do business, thereby positioning itself as a manufacturing hub, with easy access to international markets and the advantage of a 3,000 km coastline and close connections to China.

Component production at Huydai Thanh Cong Automobile Factory in Ninh Binh . Illustration photo: Vietnam Pictorial.

The article said Vietnam is shifting towards producing higher value products, focusing more on electronics production than textiles.

One of Vietnam’s most important sources of FDI is Samsung Electronics. Samsung employs tens of thousands of workers in Vietnam and is the largest investor in the country, with 50% of its handsets manufactured there.

The article argues that Vietnam will be upgraded from its current frontier market status to an emerging market according to the MSCI index. The Vietnamese stock market in general now meets the requirements of size and liquidity, with retail participation increasing fourfold in the past 2-3 years thanks to digital payments.

According to VNA/Tin Tuc Newspaper

Source link: http://baoninhthuan.com.vn/news/138438p1c25/viet-nam-duoc-danh-gia-la-ngoi-sao-dang-len-de-tro-thanh-thi-truong-moi-noi.htm