Research: Vietnam On Track To Become An Upper-Middle Income Country By 2023

Vietnam is on course to become an upper-middle-income country by 2023 according to predictions made by The Japan Centre for Economic Research (JCER).

According to JCER’s medium-term forecast of Asian economies titled “Asia in the coronavirus disaster: Which countries are emerging?”, the ASEAN country is expected to rake in enough GDP to surpass Taiwan in the next 15 years, as reported by Vietnam Plus.

However, these assumptions were gathered based on a standard scenario in which the pandemic is a passing event and will not affect the economic structures over the medium term.

This assumption claims that only China, Vietnam and Taiwan are on track to maintain positive year-on-year growth rates in 2020. Vietnam’s strong exports are expected to be the leading factor in sustaining their growth rate of about six per cent, which is said to propel the Vietnamese economy past Taiwan in 2035 on a scale of comparison. This would make the country the second-largest economy in Southeast Asia after Indonesia.

Vietnam is also reportedly on track to achieve upper-middle-income status in 2023 with a per capita income projected at 11,000 USD (RM44,566) in 2035.

Nonetheless, the report also includes an alternative scenario of different extremities. In this scenario, the pandemic not only damages the current economy but is also set to affect the openness of trade, spending on R&D, undermining the countries’ potential growth rates and urbanisation among other factors.

Following this alternative scenario, the growth rates of the US, Vietnam, Singapore, and other countries would be significantly lower than those expected in the standard scenario. The reasons for this are largely due to trade blockages limited by the pandemic.

Nonetheless, Vietnam’s success in handling the Covid-19 pandemic cannot be denied. For a population of approximately 96 million, the country has managed to cap its total number of pandemic cases at 1,405 to date. Even the UN has acknowledged and commended its early, proactive response to the virus.

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