Hanoi, December 30, 2024 — Vietnam’s stable business environment, proactive government reforms, and strategic geopolitical position have significantly enhanced its appeal to foreign investors, according to Andrea Coppola, the World Bank’s lead economist and program leader for Vietnam, Cambodia, and Laos.
Economic Performance in 2024
Despite global challenges, including geopolitical tensions, climate change, and natural disasters, Vietnam’s economy has demonstrated resilience throughout 2024. Increased demand from major export partners, notably the European Union and the United States, has spurred a robust recovery in exports and industrial production. This external demand, coupled with a gradual revival in domestic consumption, has positioned Vietnam on a positive growth trajectory expected to continue into 2025.
Key Factors Attracting Foreign Investment
Coppola identifies three primary factors contributing to Vietnam’s attractiveness to foreign investors:
Stable Business Environment: Vietnam offers a stable and predictable business climate, a critical consideration for investors seeking reliable markets.
Government Reforms: The Vietnamese government’s continuous efforts to enhance the business environment have garnered international recognition, reflecting a commitment to economic openness and regulatory improvements.
Strategic Geopolitical Position: Serving as a bridge between major powers like China and the United States, Vietnam leverages its strategic location to attract substantial foreign investment, facilitating access to diverse markets.
Recommendations for Sustained Competitiveness
To further strengthen its competitive edge, Coppola suggests that Vietnam focus on:
Enhancing Workforce Skills: Investing in education and vocational training to develop a skilled labor force capable of meeting the demands of a dynamic economy.
Upgrading Infrastructure: Improving transport and energy infrastructure, with an emphasis on clean energy, to reduce the carbon intensity of export products and support sustainable development.
Leveraging Trade Agreements: Fully utilizing existing trade agreements and minimizing non-tariff barriers to boost trade and investment flows, thereby integrating more deeply into the global economy.
Economic Outlook for 2025
The World Bank’s latest forecasts project that Vietnam will maintain strong growth in 2025, with an expected GDP growth rate of around 6.5%. This projection positions Vietnam among the fastest-growing economies in East Asia and globally. While trade is anticipated to remain the primary driver of economic growth, export growth may moderate due to potential slowdowns in demand from major economies like the U.S. and China. Nonetheless, a sustained recovery in domestic demand, driven by improved investor and consumer confidence, is expected to support Vietnam’s economic expansion.
Conclusion
Vietnam’s strategic initiatives and favorable business environment continue to charm foreign investors, reinforcing its status as a burgeoning economic hub in Southeast Asia. By focusing on workforce development, infrastructure enhancement, and effective utilization of trade agreements, Vietnam is well-positioned to sustain its economic momentum into 2025 and beyond.