Bright outlook ahead for Vietnamese economy in 2022
Despite numerous enduring difficulties caused by the prolonged COVID-19 outbreak, Vietnam has managed to secure a GDP growth rate of 2.58% this year, beating off recent projections by the World Bank and the Asian Development Bank.
Major international organisations and experts positively acknowledged Vietnamese efforts to weather the brunt of the COVID-19 crisis and reboot the local economy, with many believing that the country would once again achieve high growth in 2022.
This year has seen the country achieve a record high export value of more than US$336 billion thanks partially to the opening of the international trade system and the full implementation of free trade deals, such as the EU – Vietnam Free Trade Agreement (EVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific partnership (CPTPP).
Ambassador of the EU Delegation to Vietnam Giorgio Aliberti partly attributed the impressive figure to the country’s exports to the EU, which represents a large but demanding market.
This marks a positive sign that has created momentum going into next year, especially when the free trade deal between the two sides really comes into full play, he said.
Meanwhile, foreign direct investment (FDI) attraction is also a bright spot in the country’s economic picture for 2021. The Ministry of Planning and Investment reported that Vietnam attracted US$31.15 billion in FDI as of December 20, an annual rise of 9.2%.
The UN Conference on Trade and Development (UNCTAD), in its World Investment Report 2021, named Vietnam among the world’s top 20 host economies for FDI for the first time.
Christian Ludwig, former German Ambassador to Vietnam, said he consistently told businesses that the Vietnamese market represents an attractive destination, especially in the industrial sector.
The country maintains a stable and strong investment environment that boasts a positive index of industrial production, stated the diplomat, adding that factors such as stability are key to business success.
Echoing the diplomat’s view, Andy Ho, managing director and chief investment officer of VinaCapital, expressed his optimism about future FDI attraction, despite facing a slowdown in the second quarter due to the implementation of blockade measures.
The Vietnamese market is still an attractive destination for foreign businesses thanks to its stability in institutions and society, as well as low labour costs, noted the business executive.
As such, leading foreign business associations nationwide have continuously conducted surveys for their businesses over the past few months to find their confidence in the local investment environment. Accordingly, nearly 80% of firms rated their medium and long-term prospects as either ‘very positive’ or ‘positive’.
Both the World Bank and the Asian Development Bank over the last month also agreed that the opening of the international trading system and the shift of the COVID-19 strategy by the Government has helped the country’s trade balance to improve, thereby helping its economy grow and attract greater foreign investment.
Foreign media have also published stories, making positive comments on the Vietnamese economic outlook ahead in 2022. Indeed, Russian news agency Sputnik reported that thanks to the rapid vaccination campaign, along with the flexible COVID-19 strategy implemented, the Vietnamese economy is showing signs of recovery and will certainly regain its strong growth momentum ahead in 2022.
In an article, Modern Diplomacy emphasised that in order to recover its economy, Vietnam has sought to expand the market, take advantage of free trade agreements, and increase investments in areas heavily damaged by the pandemic. With the timely opening policy and expansion of the vaccination campaign to control the spread of the pandemic, it has reduced labour disruptions affecting production and partially supported vulnerable groups in society.