The optimistic prospect of Viet Nam’s economy post COVID-19
The sudden emergence of the COVID-19 pandemic tumbled the whole world, pushing the global economy into a historic shock. However, an article published on Sputnik indicated that Viet Nam’s economy has gradually recovered, just like a long-compressed spring ready to bounce back.
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Viet Nam can still do wonders
With the emergence of a fast, strong, and dangerous 4th pandemic wave, in the third quarter of 2021, for the first time, the country's economic growth dropped sharply by 6.17%. This is the deepest decline ever recorded. In the first nine months, Viet Nam's GDP increased by only 1.42%.
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| For the first time, Viet Nam's import and export exceeded 660 billion USD. |
However, according to the article, the Government has a timely policy adjustment, with the issuance of Resolution 128/NQ-CP in October, switching from “Zero COVID” strategy to "Safe and flexible adaptation and effective control of the COVID-19 pandemic" and a rapid and high vaccination rate. With these effective measures, the country's economic situation immediately improved.
Up to now, Viet Nam still maintains a positive growth rate of over 2%. The 10-month average consumer price index only increased by 1.81%, much lower than the allowed rate. Inflation is below 4% which met the target of the National Assembly. These are achievements that not every country can do.
In October alone, newly registered foreign direct investment (FDI) increased by 11.6%; exports increased by 16.6% over the same period in 2020.
Compared to September 2021, in October, the number of newly established businesses increased by 111%, registered capital increased by 74%. Especially, aggregate demand witnessed a strong comeback, the total retail sales of consumer goods and services increased by over 18%.
According to statistics provided by the General Department of Customs in mid-December, Viet Nam’s import and export exceeded the 660 billion USD mark for the first time, an increase of over 21%, putting Viet Nam into the top 20 leading economies in the world in terms of international trade. Viet Nam continues to have a trade surplus, it is estimated that the figure will increase by about 2.1 billion USD at the end of the year.
Meanwhile, FDI attraction still maintained a regular increase, reaching over 29 billion USD, up 0.5 billion USD over the same period last year.
According to the author, even though 2021 is not over yet, looking at these important economic indicators, it can be seen that "Viet Nam can still do extraordinary things".
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| Delegates at the seminar on one year of EVFTA implementation on November 4, 2021. (Photo: Tuan Anh) |
Experts are optimistic
Given these signs of recovery, Sputnik cited forecasts of economic-financial organizations, institutions and experts, all of whom are really upbeat of Viet Nam’s economic growth prospects in 2022.
Country Director of the Asian Development Bank (ADB) in Viet Nam Andrew Jeffries, Viet Nam has an open economy so it suffered heavy impact from the COVID-19 pandemic.
However, so far, Viet Nam’s major partners are recovering quickly and thus trade is being promoted stronger. In particular, the high vaccination rate creates favorable conditions for opening up the economy, boosting growth.
Mr. Jeffries stressed that, in 2022, Asia will witness a remarkable export recovery and Viet Nam will continue to take advantage of these opportunities. Also, Vietnamese businesses need to quickly seize this chance to boost exports in 2022, improve the quality of goods to penetrate more large and potential markets.
As export is the major driving force of the economy, experts said that Viet Nam should make good use of the opportunity and integrate deeply, through its system of 15 Free Trade Agreements (FTAs). In which, many new-generation FTAs like CPTPP and EVFTA can be used as a significant leverage and boost for the country’s commodity trade with the world's leading markets.
HSBC Global Research believes that Viet Nam can regain its growth momentum of 6.8% next year if all goes well.
Meanwhile, World Bank Lead Economist and Program Leader for Viet Nam Jacques Morisset said that, Viet Nam can achieve a growth rate of 6-6.5% in 2022 if these two conditions are met: control the pandemic and improve the supply-demand balance. The Government also needs to implement measures to stimulate demand.
Besides, Viet Nam still has fiscal space, with the public debt-to-GDP ratio at only 44% while the public debt ceiling has been approved by the National Assembly at more than 60%, so Viet Nam still has room to borrow capital.
According to Dr. Can Van Luc, Chief Economist at the Joint Stock Commercial Bank for Investment and Development of Viet Nam (BIDV), in terms of export, Viet Nam’s pandemic control has contributed to the economic recovery of its major trading partners such as the US, China, EU, ASEAN, etc. He forecasted that by 2022, the total import-export turnover could grow by 13-15%.
The article on Sputnik noted that Viet Nam needs to stay alert, strengthen the internal resources of the economy, ensure good control of the pandemic, and avoid disruption of the global supply chain.
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