Deep Dive into emerging market equities: Good time to invest in the sector during pandemic – or not?
Investment Week, 15 October 2020
Matthew Read is a senior analyst at QuotedData
Vietnam is punching way above its weight. And it may well surge ahead with renewed confidence in the post-Covid world.
Economically, it is small compared to many Asia neighbours. You could fit more than 50 Vietnamese economies inside a China-sized GDP, for example. Yet it would be a mistake to dismiss Vietnam as just another niche ‘frontier’ opportunity.
According to the International Monetary Fund, Vietnam will have the fastest-growing economy in Asia this year and among the top ten countries globally. The per capita GDP level starts from a fairly low base at under $9,000 (16% of that of the UK). Yet when China was at an equivalent stage, its economy doubled in size in just six years. Vietnam sits at a significant inflection point.
Figure 1 highlights this low starting point with the huge potential for growth while figure 2 shows how it is building pace relative to other more developed economies such as the UK and the US.
Vietnam is moving out of a second wave of Covid infections. In its first wave, Vietnam proudly held a record for zero deaths. Numbers of deaths following the second wave are still happily very low, well under 50, especially for a population of nearly one hundred million.
The country has been able to employ strict control measures and strong messaging on the back of its centralised societal structure and culture.
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