Vietnam economy among fastest-growing markets amidst global economic threats

January 19
7:00 AM 2016

While bigger emerging economies are faltering, Vietnam's economy is steadily growing at almost 7 percent this year, making it one of the world's fastest-growing markets. This Southeast Asian Country was able to defend itself from the global volatile market through its rising domestic demand and strong foreign direct investment.

According to Bloomberg News, the impressive performance of Vietnam's economy is bolstered by its leadership transition, which is expected to bring economic reform and improvements. The Communist party has created a socioeconomic plan for 2016 to 2020 that targets a 7 percent average annual growth rate.

The New York Times reported that the national congress of Vietnam's ruling Communist Party will convene on Wednesday to choose the country's leader. This event happens every five years. Vietnam's new Prime Minister Nguyen Tan Dung is a charismatic leader who favors close relationships with the US. He is battling conservative apparatchik general secretary Nguyen Phu Trong.

The Vietnam Net wrote that Vietnam entered a new path of development after hitting a 6.68 percent GDP growth rate last year. It has also signed free trade agreements with South Korea, as well as the European Union. The country has also joined the ASEAN Economic Community, and it has finished negotiations with the trans-Pacific Partnership. All these factors will help the country create new jobs, raise incomes, curb poverty, increase exports, attract more foreign investments, reform its economy, and boost economic growth.

"In a very subdued global environment, domestic demand is king," said Natixis SA Hong-Kong based senior economist for emerging Asia, Trinh Nguyen. "People in Vietnam are becoming more optimistic about the future. In both the regional and global landscapes, it's set to outperform."

Vietnam's economy is seen to grow 6.7 percent in 2016, according to Bloomberg surveys. The next communist party general secretary will be given the responsibility to come up with a growth path that would make sure that the soaring credit growth and state company inefficiencies of the past won't happen again. 

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