Vietnam's economy is expected to surpass Singapore by 2029, according to a report by Singapore-based DBS Bank.
Vietnam on track to overtake Singapore in decade, according to a report by Singapore-based DBS Bank.
At present, the size of the Vietnam economy is about US$224 billion, or about 69% of Singapore’s economy (US$324 billion), which is also the third largest in the region, behind Indonesia and Thailand.
Vietnam has the potential to grow at a pace of about 6-6.5% over the next decade, thanks to strong foreign investment inflow and productivity growth in the coming years.
“If it can sustain that pace of growth, Vietnam’s economy will be bigger than Singapore’s economy in ten years’ time,” Singapore-based economist Irvin Seah said in a research note issued on May 28.
DBS forecast that if Vietnam can maintain the growth pace of about 6-6.5% in the coming years, and that Singapore continues to grow at a matured pace of about 2.5%, then the real GDP of these two economies will intersect by 2029.
Vietnam’s government expects gross domestic product to expand at least 6.8% this year. Future growth will be boosted as the nation’s favourable demographic dynamic, productive labour force, much-improved infrastructure and stable politics encourage international inflows, said Seah.
“Global investors have been lining up to be a part of the Vietnam narrative,” he said, adding that strong FDI from China and Hong Kong (China) in the first four months of this year might well mark the beginning of a new trend.
Vietnam should take advantage of the next wave of digital technologies such as blockchain, AI, IoT and cloud-based services to become Asia’s next high-performing economy and improve the living standards of its residents, experts said.
While some economists warned of the possibility of Vietnam lagging further behind regional countries, others believe that Vietnam will still perform well.
Vietnam’s digital economy has progressed rapidly in recent years, but challenges in network security require the country to build a comprehensive national strategy to address network vulnerabilities.