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Challenges Ahead but Vietnam’s Economy Remains on Fast-track

  • Vietnam's Prime Minister Pham Minh Chinh announced that the country's GDP will increase by 8% this year, exceeding expectations

  • Vietnam's economic growth has been driven by three main factors: infrastructure investment, a favorable trade environment, and competitive wages

  • Vietnam spends around 6% of its GDP on infrastructure projects, including a highway between Ho Chi Minh City and Hanoi, a new international airport, and metro projects in Hanoi and Ho Chi Minh City

  • Vietnam has signed several bilateral trade agreements and is a member of the Association of Southeast Asian Nations (ASEAN), which has also signed several free trade agreements (FTAs)

  • The EU-Vietnam FTA, UK-Vietnam FTA, and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) have all helped boost Vietnam's exports

  • Vietnam's wages remain competitive compared to other countries, especially China, and it has a young, dynamic workforce with a large number of engineering graduates

  • However, fuel shortages, fuel price increases, and inflation are potential challenges for Vietnam's economy, and the country needs to focus on developing its service industry, high-tech industries, and domestic consumption to sustain long-term growth.

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