Vietnam revises GDP target this year to 6.5%

The country’s gross GDP is projected to surpass seven percent in Q3

Infrastructure development is a major factor driving FDI and economic growth in Vietnam. tkjoytoys/Shutterstock

Vietnam’s gross GDP is projected to surpass seven percent in Q3, according to NASDAQ. The regional manufacturing hub’s GDP accelerated to 7.7 percent in Q2 from 5.1 percent in Q1. 

The official economic growth target for this year ranges from six to 6.5 percent.

According to investment firm One Asset Management (ONEAM), there are four contributors to Vietnam’s robust economic growth that also draw foreign investors, reported the Bangkok Post.

First, there was continuous economic growth despite the pandemic. The expansion is attributed to a recovery in consumption and the service sector as a result of borders reopening at the end of 2021. Also, data showed that FDI boosted the nation’s foreign exchange reserves. 

Furthermore, land reform policies, which ensure that land benefits the vast majority of the population. Lastly, Vietnam’s stock exchange reduced the settlement date from two to 1.5 days, which will facilitate the launch of more sophisticated products in the future.

In the World Economic Forum’s rankings, Vietnam is ranked 47th on infrastructure and 103rd on road quality.

Vietnam Briefing noted that as FDI floods into Vietnam and the government implements Industry 4.0, the current infrastructure cannot keep up.

Vietnam allots up to six percent of GDP yearly for infrastructure, 90 percent of those expenditures come from the public budget, which strains the country’s fiscal policies and national debt.

More: Vietnam’s thriving industrial real estate market sees an influx in FDI

To accelerate infrastructure upgrades, the government recently introduced public-private partnerships. The nation anticipates that private funding will account for 20 percent of infrastructure expenditure in the upcoming years, up from 10 percent in the years prior.

Infrastructure development is a major factor driving FDI and economic growth in Vietnam. Despite some significant improvements in manufacturing and transportation infrastructure, many of the projects remain inefficient, and advanced technologies are not yet widely adopted and utilised.

The government’s unwavering commitment to FTAs, preferential investment laws, and a strong FTA expansion program are assisting Vietnam’s infrastructure to develop considerably.

The Property Report editors wrote this article. For more information, email: [email protected].