Vietnam accelerates post-pandemic economic recovery

The first year of the post-pandemic economic recovery journey has seen many positive signals, with a boom in investment, manufacturing and business, since COVID-19 was effectively put under control.

International organisations are upbeat about Vietnam's growth in the post-pandemic period. (Photo: Hai Anh)
International organisations are upbeat about Vietnam's growth in the post-pandemic period. (Photo: Hai Anh)

Growth in the first quarter did not return to pre-pandemic levels but was higher than the same period of 2020 and 2021. Inflation was curbed at 1.92% amid global rises in the prices of goods and materials. Export continued to be a bright spot with a trade surplus of 2.53 billion USD in the first four months of 2022, while government revenue increased by 15.4% year on year.

In a document sent to National Assembly deputies, the Government emphasised that the epidemic has been put under control, the macroeconomy remains stable, major balances of the economy have been ensured, key sectors are all recording higher growth, and many large-scale infrastructure projects are being implemented with strong determination.

However, the economic recovery path remains bumpy amid the uncertainties in the global political situation and internal weaknesses of the economy. Controlling inflation is a challenge amid rising fuel prices while public investment disbursement remains slow. In such a situation, the goals of achieving 6-6.5% economic growth and keeping inflation under 4% have become enormous challenges.

The National Assembly adopted Resolution 43/2022/QH15 on fiscal and monetary policies with the aim to support the socio-economic recovery and development programme, with total funding of 347 billion VND (15 billion USD). The programme has been promptly implemented by the Government by providing interest rate support, reducing value added tax for enterprises, supporting house rent for workers and constructing key transport projects.

The implementation of the programme is expected to raise GDP by 2.9% in 2022 and 0.2% in 2023, thus helping Vietnam to realise the growth target of 6.5-7% during the 2021-2025 period, while ensuring stable jobs and income for workers and keeping the unemployment rate at 2-3%.

Recently domestic and international research organisations have made optimistic forecasts about Vietnam’s economic recovery prospects. The World Bank predicts that Vietnam’s growth in 2022 will reach 5.3% and then stabilise at around 6.5%. The International Monetary Fund sees Vietnam’s growth at 6% and 7.2% in 2022 and 2023 respectively, while the Asian Development Bank expects Vietnam’s economy to recover to 6.5% in 2022 and 6.7% in 2023. Domestic agencies also forecast that the economy will expand by 6-6.5% this year under an optimistic scenario.

In order to accelerate economic recovery and fulfil the set targets, the Government has identified 12 key tasks, with a focus on expediting the implementation of support packages and public investment. The Government is also seeking new growth drivers in science and technology, digital transformation, innovation, and clean and renewable energy. On top of macroeconomic stability, such measures are expected to help the Vietnamese economy speed up on the recovery path and soon return to the growth orbit.