Standard Chartered names Vietnam as a “stand out ASEAN trade growth success story.”
According to a press release by Standard Chartered, Vietnam shows the strongest progress in trade growth potential in ASEAN, driven by improvements to the country’s trade readiness and economic dynamism.
The results of the bank’s Trade20 Index have showcased a dramatic increase in Vietnam’s trade readiness; this has been attributed to infrastructure enhancements and improvements to its ease of doing business score. In regard to economic dynamism, Vietnam’s bright horizon has been driven by healthy growth, particularly in terms of export volumes.
Because of these developments, the country is ranked sixth among 20 economies with the greatest potential for trade growth in the Trade20 Index.
According to the study, economic and political reforms over recent decades have spurred Vietnam’s economic growth, bolstered by strong domestic demand and manufacturing-led export success. The market has solid foundations for growth: it is politically stable, well-located for global supply chains and has a relatively young population. The government has built on these foundations, focusing on business reforms and deregulation, investing in human capital and infrastructure and embracing trade liberalisation.
The Vietnamese government has entered into a number of free trade agreements, with the latest being the landmark Vietnam-EU Free Trade Agreement which is expected to eventually eliminate 99% of all tariffs and open up the public procurement and services markets. With the ongoing US-China trade tension, foreign direct investment (FDI) is expected to continue to flow into the country as global businesses seek alternative low-cost manufacturing destinations.
Standard Chartered Bank projects that FDI inflows to Vietnam will remain strong in 2019 and 2020 at close to USD15 billion.
The Standard Chartered CEO for Vietnam and ASEAN and South Asia Cluster Markets, Nirukt Sapru, has said of the Trade20 Index revelations that “Vietnam’s economic openness and integration is paying off. The country has now become the fastest-growing economy in the region, a clear indicator of the benefits the country is reaping from an open economy.”
Sapru continued “With the government’s ongoing effort to improve its trade readiness and business environment, and continued strong FDI inflows into the country, Vietnam looks set for stronger trade growth.”
Standard Chartered’s Trade20 Index examined 66 economies across the globe and determined each market’s potential for trade growth by analysing changes across three equally weighted pillars, economic dynamism, trade readiness and export diversity. While most traditional trade indices are based on a market’s present performance, the study captures changes over time to reveal the markets that have seen the most improvement in the past decade. This reveals the economies where recent positive developments may point to an acceleration in trade growth potential.
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