Optimistic signals emerge for Vietnam’s economy
Optimistic signals emerge for Vietnam’s economy
The Vietnamese economy is recovering from the pandemic and growth this year may reach or exceed the set targets.
Exports are growing well |
Positive forecasts
The S&P Global Ratings upgraded its long-term sovereign credit rating on Vietnam to BB+. The agency also forecast that Vietnam’s gross domestic product (GDP) growth will reach 6.9 percent this year and maintain a long-term trend of growing 6.5-7 percent from 2023 onward.
The Asian Development Bank (ADB) maintained its forecast for Vietnam’s GDP growth at 6.5 percent in 2022 and 6.7 percent in 2023. ADB Country Director for Vietnam Andrew Jeffries said high COVID-19 vaccination rates will allow the Vietnamese government to implement more flexible pandemic control measures, push for trade expansion and boost tourism. Jeffries also praised the government’s economic development and recovery program approved by the National Assembly in early 2022 to promote economic growth through support policies for businesses and workers.
According to the General Statistics Office of Vietnam under the Ministry of Planning and Investment, in the first half of the year, Vietnam’s GDP grew by 6.42 percent, higher than the 2.04 percent and 5.74 percent recorded in the same period in 2020 and 2021, respectively.
Industrial production is recovering fast |
Short-term risks
Economists say Vietnam cannot be sanguine about its economic growth target in 2022, especially since many international organizations have lowered global GDP growth forecasts. The World Bank (WB) forecast, for example, puts global growth this year at 2.9 percent instead of 4.1 percent due to a strong decline in major economies.
Deputy Minister of Planning and Investment Tran Quoc Phuong said businesses are increasingly facing new and unpredictable challenges, while some major economies are showing signs of a slowdown and rising inflation. In addition to the US, the EU is facing the risk of recession with oil and metal prices increasing strongly.
Economist Le Dang Doanh said the Russia-Ukraine war raised the prices of energy and raw materials, posing great challenges for the global economy. With a high level of openness, the Vietnamese economy is vulnerable to such short-term risks, Doanh emphasized.
Nguyen Thi Huong, director-general of the General Statistics Office of Vietnam, said ministries, departments and localities need to focus on several solutions to overcome raw material shortages and limit prices of input materials. These include ensuring energy security and safety with a focus on renewable energy development; promoting administrative reforms, facilitating trade and production, and export-import activities, adopting preferential policies to boost the development of domestic material, components and parts suppliers, and strengthening international cooperation to seek alternative raw material sources. In particular, Vietnamese businesses are advised to seek domestic sources of raw materials to partly replace imported ones.
