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Experts positively assess Vietnam’s economic prospects

The Asian Investor page publishes a positive assessment of Vietnam’s economic prospects. The article quotes experts as saying that thanks to high-speed industrialization and a rapidly growing middle class, Vietnam is ready to rise strongly after COVID-19 pandemic and gradually become a destination of interest for foreign investors.

According to an article published on March 14, the optimistic assessment is made on a solid economic foundation thanks to the stable growth of Gross Domestic Product (GDP), averaging 6% per year until 2019. Despite the damage caused by the COVID-19 pandemic over the past two years and new threats from the crisis and inflation in Ukraine, experts still believe the outlook is positive.

The World Bank (WB) forecasts that Vietnam’s economy will grow by 5.5% in 2022, while the International Monetary Fund (IMF) gives a higher figure of 6.6%, compared to the growth rate. growth of 2.6% in 2021. Mr. Jason Ng, CEO of VCG Partners (Singapore subsidiary of VinaCapital, one of the leading investment management firms in Vietnam), forecasts Vietnam’s GDP growth of more than 7% this year on factors including the recovery of consumption, the ability to fully reopen to foreign tourists and the $15.3 billion stimulus package that was just approved in January. January 2022 to support businesses and workers affected by the pandemic.

The article emphasizes that one of the important economic drivers is industrialization with the support of foreign direct investment (FDI). FDI did not drop much despite being affected by the pandemic. According to the World Bank (WB), about 15.8 billion USD of foreign capital has poured into Vietnam in 2020, down slightly from 16.1 billion USD in 2019. The official figure for 2021 is expected to remain the same. maintained at this level due to the attractiveness of cheap labor, Vietnam’s young and qualified workforce, stable currency and incentives for businesses. The article notes that Vietnam has signed many free trade agreements (FTAs) with the US, the European Union (EU), China, Japan, South Korea and ASEAN, helping Vietnam improve its position as a trade center. production and export center.

Also according to the article, another key driver is increased domestic consumption. Increased foreign investment in recent years has created jobs and a large middle class as well as “nourished” many local small and medium business owners who become suppliers to large manufacturers. . The emergence of a middle class – those earning $700 a month – will boost domestic consumption. Mr. Jason Ng said that the young middle class is digitally savvy, so e-commerce and the distribution and logistics sectors are expected to benefit. Financial services, residential real estate, digital technology and “green” products are potential investment opportunities.

However, Mr. Jason Ng stated that the biggest risk for foreign investors right now is that inflation will flare up again and the Vietnamese dong may depreciate against the USD. However, according to him, with foreign exchange reserves of more than $100 billion and a good trade surplus, Vietnam can still stand.

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