Vietnam Economic growth is optimistic in 2022

With experience, capacity, and ability to respond well to the epidemic, many experts believe that Vietnam's economy will quickly recover in 2022.

According to Minister of Planning and Investment Nguyen Chi Dung: “The 4th wave of COVID-19 epidemic caused socio-economic impacts heavily, but Vietnam still achieved and exceeded many economic targets. GDP growth was 2.58%, import and export reached a record number of USD 668.5 billion (export surplus was about USD 4 billion), an increase of 22.6% compared to the previous year, putting Vietnam in the group of 20 leading economies in international trade. Attracting foreign direct investment (FDI) reached 31.15 billion USD, an increase of more than 9.2 billion USD compared to 2020.” The above figures show that Vietnam is entering 2022 with positive foundations and a relatively bright New Year picture.

Besides, the announcements of the Government have shown that Vietnam has great determination to recover the economy. In the first month of 2022, for the first time in history, based on the Government's proposal, the National Assembly convened an extraordinary session to decide on sufficient resources for post-pandemic economic recovery. As a result, the National Assembly approved a monetary and financial package of VND 350,000 billion to support businesses and help the economy recover and develop.

Therefore, many international organizations have made optimistic forecasts about Vietnam's economy in 2022. According to country risk analysts at Fitch Solutions, Vietnam's economy will achieve a growth rate of 7.0% in 2022, higher than the growth target of 6-6.5% set by the Government. Standard Chartered also forecasts that Vietnam's economy will recover strongly in 2022, with a growth rate of 6.7%. This bank has raised Vietnam's growth forecast for 2023 to 7% and said that Vietnam continues to have a positive outlook in the medium term.

These organizations expect that the service sector will recover strongly as the disruptions caused by the Covid-19 epidemic will ease. Along with that, production and business activities in Vietnam will be further "normalized" in 2022, despite the potential risk of disruption due to the Covid-19 outbreak. Besides services and industrial production, construction activities will also recover strongly in 2022 thanks to the easing of domestic epidemic prevention restrictions, along with the further opening of borders to welcome foreign direct investment flows.

However, inflation can become a concern in 2022. Supply factors, such as higher commodity prices due to the impact of the epidemic, will be the main cause in the short term. A prolonged epidemic may lead to inflation risks due to supply problems. Therefore, Standard Chartered forecasts that Vietnam's inflation will reach 4.2% in 2022 and 5.5% in 2023.