Vietnam expected to grow at 6-7% annually for next decade: S&P Global

The epicentre of this momentum is the rapidly expanding export-oriented manufacturing base, which anchors Vietnam's trade balance and attraction to foreign direct investment (FDI), it noted.

Thanks in part to diversification of supply chains outside of China, Vietnam and its corporate partners, which include major global multinationals, are making swift investments in capital stock.

As the country’s economy jumped 7.1 per cent last year in a broad-based recovery from a recent property crash, S&P Global Ratings thinks this is testament to its dynamism and potential to continue taking market share in global supply chains.

FDI reached $38 billion, or 8 per cent of gross domestic product (GDP), in 2024; it has averaged 10 per cent of GDP since 2010.

A key enabler of this growth driver is the Vietnamese labour force. The availability of surplus labour in rural areas and other lower income areas and sectors can be tapped for jobs for urban or industrial areas. This serves as the bedrock for labour-intensive and low-cost manufacturing, S&P Global noted.

The workforce has shown itself to be trainable and high in quality, contributing to foreign investor confidence in the ability of the economy to absorb further investment, it said.

New wealth and the resulting impetus to domestic demand is an additional benefit of rising urban employment and rapid growth, it added.

ALCHEMPro News Desk (DS)