Viet Nam is projected to be the fastest-growing economy in Southeast Asia over the next decade, according to the report "Navigating High Winds: Southeast Asia Outlook 2024-34," released in early August.
The report, a collaboration between the Development Bank of Singapore (DBS), Bain & Company and the Angsana Council, forecasts the performance of six major economies in the region: Viet Nam, Singapore, Malaysia, the Philippines, Indonesia, and Thailand.
The report forecasts that Southeast Asia will experience faster economic growth over the next decade, with GDP and foreign direct investment (FDI) surpassing that of China. This growth will be driven by stronger domestic economies and increased investment resulting from the "China + 1" supply chain shift.
The region is expected to grow at an average rate of 5.1 percent per year.
Decade of Growth
Viet Nam and the Philippines are expected to be the fastest growing countries, with Viet Nam remaining in the lead. According to the report, Viet Nam will maintain a GDP growth rate of 6.6% between 2024 and 2034, outpacing the regional average.
Read also: Philippines Fastest-Growing Economy in ASEAN, 2nd Highest in Asia
Over the past 30 years, Southeast Asia's GDP growth has been moderate, with Viet Nam leading the region.
Viet Nam's growth is driven by positive factors such as an export-oriented economy well positioned to capitalize on "China + 1" opportunities, diverse sources of FDI, productive inter-provincial competition, and a high-quality workforce and education system.
Economic Momentum Dampened
While Viet Nam is expected to remain a leader in Southeast Asia, its position is not as strong as initially projected in 2022. The impact of the anticorruption campaign, political uncertainty, and credit weaknesses have impeded its prospects.
Initially, Viet Nam’s export-oriented and industrial park-centered economy was seen as resilient to domestic slowdowns. However, the anticorruption campaign has slowed growth by hindering infrastructure development, investment approvals, and creating challenges for joint ventures. Additionally, energy shortages and increased competition have further compounded Viet Nam’s challenges.
About the Report
To develop the forecasts in this report, DBS utilized data on total factor productivity, capital growth, labor, and human capital from CEIC, the IMF, and Penn World Table, along with expertise from Angsana Council, Bain, and DBS.
The growth assessments are based on external indexes and ratings from Euromonitor, OECD, Trading Economics, the UN, UNCTAD, the World Bank, and the WTO, and also incorporate the Herfindahl-Hirsch
Read the full report here.
