Description:
Viet Nam's economy slowed sharply in 2023, with three key drivers of growth - exports, consumption, and private domestic investment - is losing momentum. On the production side, the slowdown was led by industrial production. In the first quarter of 2024, the economy registered 5.66 percent (y/y) growth, mostly driven by the low base effect in exports, with consumption and investment recovering more gradually. Employment growth slowed and real average monthly incomes stagnated. Viet Nam's external position improved in 2023, underpinned by a large current account surplus. Viet Nam needs to increase domestic private sector productivity to realize its ambitious target of becoming a high-income country by 2045, and innovative entrepreneurship is essential to drive this growth. Improving the conditions for entry and growth of innovative startups, through development of a conducive entrepreneurial ecosystem, can help build a pipeline of highly productive firms in new and established sectors