The Development Bank of Singapore has predicted that Vietnam economy could grow bigger than Singapore by 2029. Vietnam could grow at a pace of 6 percent to 6.5 percent in the next ten years.
The Bank’s senior economist Irvin Seah said in a research report, “If it can sustain that pace of growth, the Vietnam economy will be bigger than the size of the Singapore economy in ten years’ time.” The report was published on Tuesday.
According to him, global investors have been eyeing Vietnam. “Strong FDI from China and Hong Kong in the first four months of this year may well mark the beginning of a new trend,” he added.
Several media reports said that according to the DBS report, Vietnam’s economy in the coming years could become robust due to the following factors:
- The economy could benefit from the US-China trade war
- Its economic policies are focused on long-term stability
- Significant incline in investments
Vietnam can largely benefit from the US-China trade war because its is strategically positioned in the manufacturing supply chain. That said, it has extensive free-trade agreements with several countries. The report said that the foreign direct investments flowing from China into Vietnam is ‘significantly stronger than usual’.
The Development Bank of Singapore’s forecast is largely based on factors such as robust foreign investment inflow and productivity growth in the next couple of years.
Currently, the economy is worth $224 billion. This means it covers 69 percent of Singapore’s economic size which is worth $324 billion.
“Simply put, the Vietnam economy will be bigger than the size of the Singapore economy in 10 years’ time. And this implies tremendous growth opportunities for companies and investors looking to get a slice of the action,” Seah stated his report.