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Vietnam to become a developed, high-income country by 2045

Vietnam to become a developed, high-income country by 2045

Wednesday 20, 01 2021
With outstanding socio-economic achievements, Vietnam is set to become a high-income country by 2045.

Vietnam’s objective of becoming a high-income country 

The GDP per capita of Vietnam in 2020 is USD 3,521 (nearly VND 90 million). By 2025, Vietnam would be a middle-income country with a certain level of industrialization and modernization. Five years later, in 2030, the GDP per capita of Vietnam is expected to reach about USD 7,500 USD (or VND 172.5 million). Vietnam is set to become an upper-middle-income country. And by 2045, Vietnam will become a developed, high-income country, according to Party General Secretary and State President Nguyen Phu Trong.

Vietnam’s objective of becoming a high-income country

Vietnam has achieved considerable socio-economic achievements over the years, putting the country among the regional and global fastest-growing economies. The poverty rate has gradually decreased from 58% in 1993 to 9.88% in 2016 and reached below 3% in 2020. Also, other aspects including social security, healthcare, education and training, science, and technology have seen positive progress.

With a population of nearly 100 million, Vietnam has now turned from an under-developed nation to a developing one. Its diplomatic relations with most countries have been established, showing Vietnam is a credible partner in the world. 

Realizing the objective

Speakers at the 2021 Vietnam Economic Scenario conference with the theme "Shaping the Investment and Business Strategy in a New Context" also stated that despite the complicated situation of the COVID-19 pandemic, the Vietnamese economy will still grow well in the future.

Mr. Tran Hong Quang, Director of the Institute of Development Strategy - Ministry of Planning and Investment, said in the conference that the viewpoint of the Ministry to the economy is rapid and sustainable development based on science and technology, innovation, and digital transformation.

The strategic target of the growth rate of Gross Domestic Product (GDP) of Vietnam in the period 2021 - 2030 is about 7% p.a., according to Mr. Quang.

Dr. Nguyen Xuan Thanh, a senior economist and a member of the Prime Minister's Economic Advisory Group, stated that the desire for the growth of 7% p.a in the context of the country coping with global instabilities can be put under considerable pressure. However, this objective can be achieved thanks to the macro stability of the country.

To realize the above strategic objective, there should be a breakthrough in both the institution and human resources and the promotion of human values. Along with that is the ỉnastructure improvement, focusing on transport and energy systems, information technology, and infrastructure to respond to climate changes.

In the past four years, private investment has increased rapidly, while public investment has been tightened. In 2021, Vietnam is expected to have a strong economic recovery thanks to the accelerating investment by private enterprises and in infrastructure. Maintaining low-interest rates will be the driving force for private enterprise investment in 2021 and the following years.

Also, According to Mr. Thanh, thanks to the strong inflow of foreign investment into Vietnam and the recovery of domestic purchasing power through digital transformation, 2021 is expected to be a bright year for Vietnam's economy. 

The next growth driver of the Vietnamese economy in 2021 is exportation. Vietnam is an open economy with diversified export markets. Exports to the US and China have offset the decline in exports to other markets. In 2021, Vietnam will strongly export to the European Union (EU) and ASEAN. 

Realizing the objective

Regarding the banking sector, as of July 2020, the credit growth only reached over 4%, although the State Bank of Vietnam (SBV) had lowered interest rates three times until September 2020. However, the credit growth started to increase again from August and rose rapidly in November and December. At the end of 2020, the credit growth reached 12.13% thanks to strong capital absorption. Over the past time, the SBV has been steadfast in controlling inflation but still provided sufficient capital for the economy and businesses. With the abundant liquidity of the system, the SBV is set to stabilize interest rates and provide sufficient capital for economic growth. 

Compiled by VietnamCredit

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