According to the report, ASEAN workers overall have had an impressive track record in the last 15 years, with productivity growing 3% per year between 2000 and 2015. This surpasses the per year growth rate of Latin America by 2% and Africa by 1.44%.

Sectoral shifts (workers moving from agriculture to manufacturing and services), urbanization and an increase of workers in the ‘prime age’ (25 – 54), have been the main drivers of productivity growth throughout the region, with the exception of Singapore.

Notably, Vietnam has highest productivity growth in ASEAN.

Sectoral shifts, urbanization and a workforce in the highly productive ‘prime age group’ have helped Vietnam achieve a 5% productivity growth in the last 15 years and will continue to drive 4% growth in the next decade, the report said. Rising domestic demand and booming Foreign Direct Investment (FDI) are driving economic growth of 6.5% in the next 5 years despite the challenging regional and global environment.

Priyanka Kishore, ICAEW economic advisor and Oxford Economics lead economist, said: “Pure productivity growth, however, ranks below its ASEAN-6 neighbors except Singapore. This highlights an opportunity for Vietnam to invest in productivity measures to improve output per worker."

Mark Billington, regional director, ICAEW South East Asia, said: “Training, development and skill upgrading must play an essential role if Vietnam wants to maintain its growth path and improve the productivity and output of its workforce. As its economy continues to diversify, it will need a highly skilled workforce; one which has moved closer to a global standard of technical knowledge, business skills and innovation.”

The ICAEW Economic Insight: South East Asia is a quarterly forecast for the region prepared directly for the finance profession.

Produced with Oxford Economics, ICAEW’s partner, one of the world’s foremost advisory firms, the report is the analytical tool providing unparalleled ability to forecast economic trends.

It provides a unique perspective on prospects for the South East Asia region as a whole and for its individual economies against the international economic background.

Source: Vietnamnet