Vietnam may turn upper-middle-income nation in 2023: JCER

21 Dec '20

2 min read

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Vietnam may become an upper-middle-income country in 2023 and its gross domestic product (GDP) will surpass that of Taiwan in 2035, the Japan Centre for Economic Research (JCER) predicted recently. In its medium-term forecast of Asian economies, it said only China, Vietnam and Taiwan are on track to maintain positive year-on-year growth rates in 2020 under a standard scenario.

By 2023, Vietnam’s per capita income will be headed for $11,000, according to JCER.

In the standard scenario, JCER assumes that the pandemic is a transient event that will not affect economic structures over the medium term.

Titled ‘Asia in the coronavirus disaster: Which countries are emerging?’, the JCER report addresses the impact of the COVID-19 pandemic and looks at how Asian economies are faring compared with others around the world.

Vietnam is seen sustaining a growth rate of about 6 per cent in 2035, thanks to strong exports. This would propel the Vietnamese economy past Taiwan’s in 2035 in terms of scale, and make it the second-largest economy in Southeast Asia after Indonesia, said JCER.

The report also included a severe scenario that describes an outcome in which the coronavirus not only damages today’s economy but also affects urbanisation, trade openness, research and development spending, and a host of other factors, undermining countries’ potential growth rates over the medium term.

In this scenario, the growth of the United States, Vietnam, Singapore and others in 2035 would be significantly lower than those under the standard scenario, largely due to trade blockages. Vietnam’s economic scale at that time is projected to still be smaller than that of Taiwan, JCER said.

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