Vietnam stands a chance to be among world’s next tiger economies – called CIVETS, the government website reported, citing a report on the Wall Street Journal (WSJ).
WSJ’s “Moving on from BRICS” said countries that make up CIVETS - Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa - will benefit from fast-rising domestic consumption.
A decade after Brazil, Russia, India and China were dubbed the BRICs, any early mover advantage for investing in those economies has long gone, it said.
CIVETS are also all fast-growing, relatively diverse economies, which mean they should be less heavily dependent on external demand, said WSJ.
According to the WSJ, these nations all have large, young populations with an average age of 27.
Among the CIVETS, Vietnam has been one of the fastest-growing economies in the world for the past 20 years, with the World Bank projecting 6 percent growth this year rising to 7.2 percent in 2013.
The country’s proximity to China has led some analysts to describe it, a 90 million strong population, as a potential new manufacturing hub.
The Southeast Asian nation became a member of the World Trade Organization in 2007.
But foreign investors still face significant obstacles in Vietnam, said WSJ.
Cynics suggest Vietnam is better viewed as a holiday destination than an investment opportunity and it is only included within the CIVETS to make the acronym work.
Even HSBC's fund only has a 1.5 percent target allocation to the country.
It currently holds Vietnam Dairy (Vinamilk), which it sees as well positioned to benefit from Vietnam's 10 percent a year growth in demand for dairy products.
Lower GDP for 2011-2012 projected
Vietnam's gross domestic product (GDP) growth forecast for 2011 and 2012 has been lowered to 5.8 percent and 6.3 percent from the previous forecast released in June at 6.25 percent and 6.8 percent respectively, said International Monetary Fund (IMF)’s annual World Economic Outlook report.
Vietnam's unemployment rate is forecast to remain at 5 percent for 2011-2012.
The country's current account deficit in 2011 would be about 4.7 percent and it would be 3.8 percent in 2012, said the report.
Explaining about the adjustments in its report, IMF said that tight monetary policy and low foreign consumption demand will slow down the growth of emerging economies as well as developing countries in short term.
IMF's views are similar to the Asian Development Bank (ADB)'s opinion in its recently released report.
Like ADB, IMF not only lowered Vietnam's growth forecast, but also lowered its forecast on growth of emerging economies.
GDP growth of these economies in the second half of 2011 is forecast to around 6.25 percent from 7 percent previously and it would be 6 percent in 2012.
IMF's latest report also lowered its forecast on growth of the global economy to 4 percent in 2011-2012 due to the risks of recession and worsening public debt crisis in Europe.