According to expert Jayant Menon, Vietnam's economy has had a strong recovery after 4 years of the pandemic, with bright spots in the tourism, consumption, and export sectors.
Recently, the Fulcrum website of the Yusof Ishak Institute (Singapore) published an article titled: “Southeast Asia’s economic performance in 2024 and prospects for 2025: A way forward amid rising risks” . In the article, expert Jayant Menon gave positive assessments of the recovery of the Vietnamese economy in particular and Southeast Asia in general, after 4 years of being heavily affected by the Covid-19 pandemic.
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| Expert Jayant Menon assessed that Vietnam will be one of the fastest growing economies in Southeast Asia in 2025. Illustration photo: chinhphu.vn |
Strong recovery and growth
Citing a report by the Asian Development Bank (ADB), Mr. Menon predicted that the Southeast Asian economy will grow 4.5% in 2024 and 4.7% in 2025. Countries such as the Philippines, Vietnam and Cambodia are forecast to lead the region in terms of growth rate.
Experts said this achievement was due to the recovery of consumer demand in and outside the region, thereby promoting the consumption, investment and export sectors. He also predicted that consumption in major markets such as Indonesia, the Philippines, Vietnam and Malaysia will continue to grow thanks to the recovery of retail spending.
In addition, stable prices and a recovery in tourism have contributed to increased consumer confidence. In particular, Vietnam has surpassed pre-pandemic levels in tourist arrivals, while Malaysia, Singapore and Thailand are expected to fully recover thanks to the return of Chinese visitors.
The region’s exports have grown strongly thanks to high demand from major markets such as the US for electronics and manufactured goods. Growing demand for Artificial Intelligence (AI) chips has boosted the electronics and semiconductor industry, providing a positive outlook for high-tech exporting countries, such as Vietnam, in 2025.
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| Rising demand for AI chips is bringing positive economic growth prospects to Vietnam. Illustration photo: VnEconomy |
Many challenges and risks to face
Despite the positive signs, Southeast Asia’s economy still faces major risks, including the fallout from wars in the Middle East and Ukraine, as well as escalating trade tensions between the US and China.
Vietnam, Thailand and Malaysia have taken advantage of the tensions to attract foreign direct investment (FDI) through restructuring of supply chains in mid- to high-tech sectors. However, if political and trade tensions continue to escalate, the region could suffer negative impacts, including rising consumer costs and slowing growth.
In addition, Mr. Menon predicted that the Southeast Asian region could face risks from natural disasters and extreme weather events, reducing regional GDP by up to 30% by 2050. Developing countries are expected to be more severely affected, due to lack of preparation and dependence on climate-sensitive sectors such as agriculture and fisheries.
Focus on labor sector, avoid negative impacts from international conflicts
Technological transformation, especially digitalization and AI, is expected to boost productivity and create high-income jobs in Southeast Asia in the long term. However, it also poses short-term challenges, especially for low-skilled workers. Mr. Menon recommends that countries in Southeast Asia strengthen workforce training to reduce skills inequality and limit restructuring costs.
In addition, the differences in the rate of population aging among countries in the region create opportunities and challenges. Countries such as Cambodia, Laos and Myanmar still have increasing working population, while some other ASEAN countries are witnessing a decline in their workforce. According to Mr. Menon, promoting labor export is the "solution" to this problem, by balancing the workforce among countries.
In particular, geopolitical and trade tensions are likely to spiral out of control and could hamper the region’s green transition and technological advancement. In this context, the Singaporean expert recommends that Southeast Asian governments and businesses maintain a neutral policy and avoid retaliatory measures to limit the negative impact of international conflicts and instability.
| According to a recent forecast by the International Monetary Fund (IMF), Vietnam will rise to the third position in Southeast Asia in terms of economic scale in 2025, with a GDP of more than 571 billion USD. The IMF affirmed that Vietnam's economy will continue to record strong signs of recovery with a GDP growth rate of 2 digits in 2025. |
Source: https://congthuong.vn/viet-nam-diem-sang-kinh-te-tai-dong-nam-a-nam-2024-368521.html
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