Vietnam may be fastest growing emerging economy

Ho Chi Minh City, 12 March 2008 – Investors need to look beyond the BRICs (Brazil, Russia, India and China) for future growth opportunities according to a new report from PricewaterhouseCoopers LLP (UK).

‘The World in 2050: Beyond the BRICs’ concludes that long-term prospects for China, India and other so-called ‘E7’ economies (Brazil, Mexico, Russia, Indonesia and Turkey) are still upbeat. The report also looks at an additional 13 emerging economies, including Vietnam, that have the potential to grow significantly faster than the established Organisation for Economic Co-operation and Development (OECD) countries.

John Hawksworth, head of macroeconomics at PricewaterhouseCoopers LLP, said:

“The global centre of economic gravity is already shifting to China, India and other large emerging economies and our analysis suggests that this process has a lot further to run. Our latest projections suggest that China could overtake the US in around 2025 to become the world’s largest economy and will continue to grow to around 130% of the size of the US by 2050. India could grow to almost 90% of the size of the US by 2050. Brazil seems likely to overtake Japan by 2050 to move into fourth place, while Russia, Mexico and Indonesia all have the potential to have economies larger than those of Germany or the UK by the middle of this century.”

But the fastest mover could be Vietnam, with a potential growth rate of almost 10% per annum in real dollar terms that could push the country up to around 70% of the size of the UK economy by 2050.

“Vietnam now tops the growth rankings, which in fact mirrors its leading performance in the July 2007 PwC EM20 rankings of emerging market attractiveness to manufacturing sector inward investors,” says Ian Lydall, PwC Vietnam Senior Partner.

John Hawksworth, head of macroeconomics at PricewaterhouseCoopers LLP, added that:

“The rapid growth of the emerging economies does not mean the demise of the established OECD economies. In fact it should prove to be a boost for them through growing income from exports and overseas investments, even as the OECD share of world GDP declines.

“But while the macroeconomic story should be ‘win-win’, at the company level there are likely to be both winners and losers from the process of adjusting to this new world economic order.”