Vietnam is among world’s top 50 economies after 32 years of reform

After 32 years undergoing economic reform, Vietnam’s economy has maintained an average GDP growth rate of 6.6%, featuring among the world’s top 50 economies, according to Nguyen Thien Nhan, head of the Party Committee of Ho Chi Minh City.

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Compared to other countries with high economic growth rate over the last 32 years, Vietnam’s GDP growth is only behind that of China with 9.4%, and above South Korea and Malaysia 5.9%, Thailand 5.2%, the US 2.6%, Japan 1.7% and Germany 1.8%, Nhan said at the 48th Chief Financial Officers (CFO) World Congress as reported by local media.

Due to the US economic sanctions, the value of Vietnam’s economy in 1989 totaled only US$6.3 billion, which later experienced exponential growth since 1995 thanks to the US lifting the embargo and Vietnam becoming a member of the ASEAN, Nhan continued.

The country’s economy continued its growing path in the 2002 – 2007 period, thanks to the US-Vietnam bilateral signed in 2000 and the participation in the World Trade Organization (WTO).

During 28 years from 1989 to 2017, Vietnam’s economy expanded by 34.3-fold, reaching US$216 billion from US$6.3 billion. Over the last 22 years (1995 – 2017), the nominal GDP had increased by more than 10-fold from US$20.8 billion to US$216 billion.

The country is currently the 47th-largest economy in the world, Nhan continued.

Before 2007, Vietnam remained a low-income country with GDP per capita below US$1,000. Since 2008, Vietnam has become a lower middle-income country with GDP per capita of US$1,154, which increased to US$2,306 in 2017.

Vietnam’s economy has also been industrialized and modernized after 32 years of reform, in which the FDI sector contribution to the GDP growth had increased from 15.2% in 2005 to 21.1% in 2017, the private sector from 47.2% to 49.5% and the state sector down from 37.6% to 29.4%.

By 2020, the private sector is targeted to contribute 50% to GDP, the FDI sector 22.5% and the state sector 27.5%.

Notably, the poverty rate had declined from 14.2% in 2010 to 5.8% in 2016, while the health insurance coverage reached 81.8%.

Prime Minister Nguyen Xuan Phuc in his assessment in August stated that the GDP growth rate in 2018 is on track to beat the 6.7% target.

Phuc informed that all 12 economic targets set by the National Assembly for 2018 could be achieved, eight of which may exceed the expectation.

Under the the recent approved resolution on socio-economic development plan for 2019, Vietnam’s National Assembly targeted the GDP growth rate of 6.6-6.8% for next year.

HSBC’s recent report shows that Vietnam is likely to be the fourth biggest mover in the global GDP ranking (47th to 39th) by 2030 with GDP reaching US$500 billion.

Hanoitimes