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The Organization for Economic Cooperation and Development (OECD) has just released a report discussing the region's economic outlook, showing that Vietnam's economy will grow by 6.4% this year and increase to 6.6% in 2024. At this rate, Vietnam continues to lead the top 5 largest economies in Southeast Asia.
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| Ho Chi Minh City is increasingly developing and modernizing. Photo: VIET DUNG |
Thanks to foreign investment
In the report titled “Southeast Asia, China and India Economic Outlook 2023: Recovering Tourism After the Pandemic”, the OECD stated that Vietnam’s achievements were due to foreign investment in the manufacturing sector (especially electronics, machinery, textiles and footwear), and benefited after China relaxed its Covid-19 prevention measures. The OECD said that the end of the post-Covid-19 support programs will create conditions for Vietnam to improve its public finances, and also recommended the need to continue to closely monitor inflation trends.
Tourism is one of the sectors most affected by the Covid-19 pandemic and its response. The report highlights the economic impact of tourism in the region and explores how the sector can be reshaped to regain its important role in emerging Asia. The disruption to tourism has given countries in the region the opportunity to consider reforms in the sector, including diversifying tourism markets and addressing labor market challenges, while also meeting the new needs and preferences of the post-pandemic world, prioritizing sustainable and environmentally responsible practices, and accelerating digitalization.
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The OECD report stated that Vietnam has strengths thanks to its beautiful landscapes and the diversity of tourism types based on community life. Heritage, cultural and culinary tourism also has great potential. The biggest challenges are improving the quality of infrastructure, better linking tourism service providers, expanding local participation and better controlling mass tourism in natural areas. In addition, Vietnam also needs to quickly diversify its sources of visitors from outside, focusing on the markets of ASEAN countries and India, which Vietnam currently exploits less than neighboring countries such as Laos, Cambodia or Malaysia. At the same time, it is necessary to better exploit domestic tourism, sustainable tourism and green tourism.
Note inflation and supply chain
The report also discusses the region’s economic outlook and macroeconomic challenges at a time of heightened uncertainty and a slowdown in the global economy, particularly due to inflationary pressures, volatile capital flows and supply-side bottlenecks. According to the OECD, emerging Asian economies, including the Association of Southeast Asian Nations (ASEAN) along with China and India, have demonstrated resilience in the face of complex global developments, standing firm in the face of major challenges such as the Covid-19 pandemic, the conflict in Ukraine and the global economic slowdown.
These achievements were achieved thanks to appropriate monetary and macroeconomic policies, export performance and strong domestic demand in some countries. The average growth of emerging Asian economies is forecast to reach 5.3% in 2023 and 5.4% in 2024. Specifically, growth in the Philippines is forecast to reach 5.7% in 2023 and 6.1% in 2024, Indonesia at 4.7% and 5.1%, Malaysia at 4.0% and 4.2%, Thailand at 3.8% and 3.9% during the same period.
However, the OECD said that emerging Asian economies continue to face risks that could negatively affect growth and stability, including inflation, a global economic slowdown and supply chain disruptions.
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