Is now the best time to consider investing in Vietnam?

The world’s financial and investment markets have endured a turbulent 2020, although it’s fair to say that the coronavirus and created numerous opportunities for individuals to profit while some assets have seen their values plunge.

National economies across the globe have also taken a hit, although once again, it’s fair to surmise that some have performed considerably better than others.

Take Vietnam, for example, which has positive growth throughout this year and remains on course for further expansion in 2021. But does this make the nation a viable investment opportunity in the near or medium-term?

Vietnam’s Growth Explored

In many ways, Vietnam’s rapid and consistent growth can be traced back for 30 years or more, with a raft of economic and political reforms in 1986 helping to drive sustained evolution.

Between 2002 and 2018, the nation’s GDP per capita increased by 2.7-times year-on-year, with more than 45 million people lifted out of poverty during this time (as of 2020, less than 6% of the nation’s population now live in poverty).

Interestingly, Vietnam’s expansion rate has increased at an even quicker pace in more recent times, with annual growth peaking at around 7% in both 2018 and 2019.

Even the coronavirus has done little to halt this charge, with Vietnam one of the few nations to record marked growth during the first three quarters of 2020. Overall, the economy expanded by 1.81% in the first half of 2020, while the final growth rate for this year should hover between the 2% and 3% mark.

What’s more, the government has projected a more familiar growth rate of 6.5% for 2021, suggesting that the economy will return to its former strength quicker than expected.

The Role of Covid-19

We’ve also seen the Vietnamese dong perform relatively well this year, with the proactive nature of the government in tackling the coronavirus helping to avoid potentially damaging quantitative easing measures.

One such measure saw almost immediate border closures, despite the impact that this would have on the lucrative tourism industry. This was a lesson learned during the SARS outbreak of the turn of the century, when Vietnam was one of the first countries to eradicate the virus.

On a similarly proactive note, every single person who tested positive for coronavirus was taken to hospital for treatment and monitoring, regardless of the severity of their symptoms.

An effective test, trace and isolate system also helped Vietnam to enforce isolation and minimise the spread of the virus, with this having been a major failing in developed economies such as the UK.

So, Should You Invest in Vietnam?

Whether you consider the long-term growth that has characterised Vietnam or the way in which it has minimised the socio-economic impact of Covid-19, this country clearly offers potential as a near, medium or long-term investment opportunity.

This reputation has also been reinforced by the recent ratification of Vietnam’s trading arrangements with the UK post-Brexit, with these countries now working towards a bilateral free trade agreement that could be in place by the end of 2020.

This will reinforce the existing trade arrangements and pique the interest of international investors further, many of whom are keen on seeking out new markets and asset classes in the wake of the coronavirus pandemic.

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