An employee counts a customer's deposit of cash at the branch in the headquarters of Ho Chi Minh City Development Joint Stock Bank, known as HD Bank, in Ho Chi Minh City, Vietnam. Image Credit: Bloomberg

(Bloomberg) — Vietnam’s economy could be bigger than Singapore’s by 2029, says DBS Bank Ltd.

The Southeast Asian nation has the potential to grow at a pace of about 6-6.5 per cent over the next decade, DBS forecasts, citing strong foreign investment inflow and productivity growth in the coming years.

“If it can sustain that pace of growth, the Vietnam economy will be bigger than the size of the Singapore economy in ten years’ time,” Singapore-based economist Irvin Seah said in a research note Tuesday.

Vietnam’s government expects gross domestic product to expand at least 6.8 per cent this year. Future growth will be boosted as the nation’s favourable demographic dynamic, productive labour force, much-improved infrastructure and stable politics encourage international inflows, said Seah.

“Global investors have been lining up to be a part of the Vietnam narrative,” he said. “Strong FDI from China and Hong Kong in the first four months of this year may well mark the beginning of a new trend.”