Optimism about Vietnam’s economic prospects in 2022

Friday, 2022-01-14 16:39:29
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Hai Phong Port
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NDO - Despite facing numerous difficulties due to COVID-19 over the past two years, Vietnam has managed to protect public health and maintain economic stability, which is the groundwork for Vietnam’s solid economic recovery in 2022.

According to experts, the firm foundation during the 2010-2020 period has helped Vietnam withstand the severe impacts of the pandemic. In 2020 Vietnam was one of the few countries in the world, with positive growth, at 2.91%, while growth in several developed economies was in negative territory.

Such results came from the Party and Government’s correct policies and direction, with the joint efforts of the business community and the people, in realising the dual goals of economic development and virus containment.

In 2020, export growth driven by new free trade agreements such as the CPTPP and the EVFTA and 15 other trade pacts helped stimulate overall economic growth. GDP in the final three months of 2020 grew by 4.48%, while exports for the entire year rose by 6.5% to 281.5 billion USD. Vietnam posted an all-time high trade surplus of 19.1 billion USD. Such trade agreements are expected to help the Vietnamese economy to grow in a sustainable manner in the coming years.

In 2021, economic recovery slowed down due to the emergence of new coronavirus variants, making the COVID-19 situation become more complicated and unpredictable. The economy grew by only 2.58%, the lowest in ten years.

But a closer look at the economic picture shows that the Government made important changes to its operations and achieved positive results in its regulation. Following prolonged lockdowns and social distancing periods to deal with the fourth outbreak, the Government promptly shifted to its strategy of adapting safely and flexibly to the pandemic, both in fighting the pandemic and restoring economic development.

A breakthrough was the prompt introduction of Resolution 128, which has reversed the course of GDP growth, from negative 6.02% in the third quarter to 5.22% in the fourth quarter, while government revenues rose by 3.7% compared to 2020. Vietnam’s export-import value reached 668.5 billion USD, up 22.6%, in which exports rose 19% to 336.25 billion USD. Agriculture remained a pillar of the Vietnamese economy, with exports reaching 48.6 billion USD. Vietnam is now among the 20 largest economies in the world in terms of trade.

Foreign direct investment (FDI) was a positive change in the economy following Resolution 128. FDI pledges in 2021 rose 9.2%, offering hope and confidence in a strong recovery for 2022. Notably during the Prime Minister’s Europe tour in November 2021, 60 memorandums of understanding were signed with a total capital of 30 billion USD. According to the World Investment Report in 2021, Vietnam was one of the 20 largest FDI recipients in the world.

With bright spots in international trade, investment and domestic production in 2021, economic expert Can Van Luc stated that if Vietnam manages to perform both tasks of epidemic prevention and economic recovery effectively, growth could reach 6.5-7% in 2022. The view is shared by Jacques Morisset, chief economist at the World Bank in Vietnam, who said that growth of 6-6.5% is entirely possible, if Vietnam can control the epidemic and improve the supply-demand balance.

In Resolution 128, the Government determined that the COVID-19 pandemic will not be under complete control before 2023. As such, Vietnam will take advantage of all resources and opportunities to stimulate the recovery process and maintain growth in 2022.

In a draft socio-economic development plan for 2022, the Government aims for growth of 6-6.5% in 2022, but Prime Minister Pham Minh Chinh has affirmed that Vietnam will not sacrifice social security for growth. The Government is still making efforts to maintain macroeconomic stability and keep inflation below 4%. The Government is also watching the situation closely to step up economic restructuring, especially removing institutional and administrative hurdles to attract and distribute investment resources.

The Prime Minister’s consistent guiding principles on administrative reform is to enable people and enterprises to access policies and solve their business. Policies on stepping up e-commerce and digital transformation, while building a digital economy and society, offer an opportunity for Vietnam to achieve the set targets.

According to senior economist Dorsati Mandani at the World Bank, Vietnam is still among the countries with decent growth, while others are in a severe downturn, emphasising that it is a sign of the recovery ability. She said the Vietnamese Government is working actively to prevent the spread of the epidemic while ensuring economic activity.

Although the Vietnamese economy had to face numerous difficulties in 2020 and 2021 in the wake of COVID-19, the Party and State’s sound directions with the Government’s taking heed of opinions from experts, the business community and the people have helped the economy to recover and record new achievements amid the gloomy picture of the global economy. Economic achievements over the past two years are the important foundations for businesses and people to have confidence in Vietnam’s economic growth prospects in 2022.

Trong Nhan/Translated by NDO