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Here is your Mekong Memo Vietnam for November 16, 2023.
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Ambitious Growth Target Remains in Place
Vietnam is setting ambitious economic targets for 2024, aiming for a 6-6.5% GDP growth. This target, involving strategies like increasing public spending on infrastructure and possibly cutting interest rates. is being floated as an attempt to stabilize the macro-economy and boost growth. The government has highlighted ideas of “open innovation” and “technological advancements” as the way forward through supporting foreign investment, clean energy, tourism, and startups, while continuing to combat corruption and inefficiencies.
Read more: VietnamPlus (GDP Target), The Realtor (Fitch Forecast), VietnamPlus (Fitch Optimism), VietnamPlus (Economic Performance), VietnamPlus (Effort for Economic Targets), Tuoi Tre News (GDP Target), Vietnam Investment Review (Open Innovation), Nikkei Asia (Economic Resilience)
Global Corporations Flock To Vietnam
Vietnam is emerging as a prime destination for foreign investment. The M&A market is seeing increased interest from foreign investors, particularly in technology startups, which are betting big on Vietnam's potential. A notable development is the MoU signed by a Vietnamese province with a South Korean firm to construct a $11 million primate breeding center. Additionally, Japan's Asahi medical device maker has begun work on a $74 million plant, reflecting growing appeal in the healthcare sector. Large US businesses, including Warburg Pincus, are showing interest in the market, with Apple's major supplier, Luxshare, planning to invest an additional $330 million in its Vietnamese factories, a welcome vote of confidence in prospects for the country.
Read more: Tuoi Tre News (M&A Market), Vietnam Investment Review (Tech Startups), Tuoi Tre News (Primate Breeding Center), The Investor (Japanese Investment), The Investor (US Business Interest), The Realtor (Luxshare)
Vietnam Airlines has joined the Association of Asia Pacific Airlines, in a move to improve its international network and presence in Asia. This membership allows the airline to engage in industry discussions and partnerships, with a hope of boosting its operational efficiency and service quality. The carrier has resumed daily non-stop flights from London Heathrow and Vietjet is launching a new HCMC - Shanghai route as it welcomes recognition as a leading airline brand by Korean consumers in 2023.
Diplomatic Outreach Strengthens Global Ties
Vietnam is strengthening diplomatic and economic ties globally. President Nguyen Xuan Phuc met with Portugal's Foreign Minister Augusto Santos Silva to discuss boosting cooperation in sectors like renewable energy and agriculture. Additionally, high-level visits from Saudi Arabia, Cambodia, and Italy focused on enhancing cultural and economic partnerships.
Read more: VietnamPlus (Portugal), Vietnam Economic News (Saudi Arabia), VietnamPlus (Cambodia), The Investor (Japan), DTiNews (Japan), VietnamPlus (Italy), VietnamPlus (Italy), VietnamPlus (Luxembourg)
Real Estate: A Quick Overview
Real estate stakeholders are pushing for solutions to remove policy roadblocks, focusing on legal reforms and credit policy adjustments. Foreigners face specific regulations when buying property, with ownership limited to housing within certain projects, while land transactions remain off-limits. The market shows a contrast with an oversupply of high-end properties and a scarcity in affordable housing, leading to high prices and reduced accessibility for middle-income buyers. There are signs of recovery, especially in HCMC's condo market, indicating a potential recovery in demand and investment opportunities.
Read more: VietnamPlus (Stakeholder Strategies), Vietnam Insider (Foreign Ownership Rules), The Star (Policy Changes), VIR (Foreigner Deterrence), The Investor (Market Contrasts), VietnamPlus (Policy Boost), Vietnam Insider (Regulation), Vietnam News (Market Recovery), VIR (Challenges)
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