Vietnam is a successful national model in attracting FDI

, Vietnam is a successful national model in attracting FDI

According to economist Aaditya Mattoo, Head of East Asia Department of the World Bank and Pacific Region: “Vietnam is a model of a country that has been very successful in attracting foreign direct investment (FDI).”

Photo captionsPhoto captions
Rang Dong Light Bulb and Thermos Joint Stock Company (Que Vo, Bac Ninh province) has implemented many solutions to both effectively control, safely adapt to the epidemic, and quickly restore stable production and economic development. economic. Photo: VNA.

According to the General Statistics Office (GSO) under the Ministry of Planning and Investment, in the first quarter of 2022, realized FDI in Vietnam was estimated at US$4.42 billion, up 7.8% over the same period last year. highest in the first quarter in the past 5 years. In which, the processing and manufacturing industry gained 3.44 billion USD, accounting for 77.8% of total FDI capital; production and distribution of electricity, gas, hot water, steam and air conditioning reached 379.8 million USD, accounting for 8.6%; real estate business reached 350.3 million USD, accounting for 7.9%…

According to Mr. Aaditya Mattoo, this helps Vietnam achieve good growth targets and reduce poverty rate to low levels compared to previous years. In the coming time, Vietnam needs to focus on finding measures that can develop service industries in depth; creating a good impetus for increasing the productivity of the service sector as well as the production and business sector and many other sectors of the economy.

However, the WB also announced an adjustment to Vietnam’s GDP growth forecast in 2022 because Vietnam faces difficulties when dealing with the Omicron strain, leading to an increase in the number of COVID-19 infections. In addition, Vietnam is also greatly affected by the import of oil with a value of up to 3% of GDP. That is not to mention the import of other materials such as: Iron, steel….which is greatly affected when the import price becomes expensive; rising costs. Therefore, if in October 2021 WB forecast that Vietnam will grow by 6.5% this year, now it is forecasted to only 5.3%. However, that is only the basic scenario, worse than the forecast scenario it may be only 4.4%.

READ MORE:  Mekong Capital closes its fifth investment vehicle at $246 million

Although Vietnam is also recognized as one of the countries that have gained the most advantages, taking the most opportunities to expand global trade, that is what makes Vietnam vulnerable. than to external shocks. This means that Vietnam must be more successful in building and perfecting its social security system.

The World Bank’s chief economist recommended: Vietnam needs to be more cautious when considering the financial system. In fact, the financial and banking measures proposed by the State Bank of Vietnam (SBV) must be carefully studied. The measures and policies of Vietnam so far have helped Vietnam go further and higher in the global value chain. But Vietnam’s participation in the global value chain at this time must be higher.

Previously, HSBC had lowered its forecast for Vietnam’s growth this year from 6.5% to 6.2% due to the risk of impacts from the global fuel shortage. Specifically: A series of challenges emerged in the context of rising world fuel prices. This causes fuel costs to increase, adversely affecting the trade balance. In March 2022 alone, crude oil imports doubled while gasoline imports quadrupled the monthly average over the same period last year.

Also due to the impact of rising oil prices, the bank forecasts that Vietnam will have another year of current account deficit, albeit at a modest level of only about 0.2% of GDP. Considering the external difficulties, this organization has also slightly increased its forecast of the USD/VND exchange rate in the short term, but the forecast level until the end of the year is still at 22,800 VND. Retail sales have not recovered strongly, with the first quarter of 2022 only reaching 2.5% compared to the same period in 2021. Part of the reason is the still weak labor market. Meanwhile, rising oil prices increased the cost of living, slowing the recovery of private consumption.

READ MORE:  Crypto Exchange Bybit Integrates ChatGPT Into Trading Tools

However, the report of HSBC still said that, with the new GDP forecast, it is likely that Vietnam will still be one of the countries with outstanding growth in the region this year. According to the Government’s target, GDP 2022 is in the range of 6 – 6.5%.

With the growth results in the first 3 months of the year, Vietnam has had a good start to 2022 with GDP in the first quarter of 2022 growing steadily at over 5% over the same period in 2021 thanks to a broad-based recovery; External growth drivers have accelerated again. 

Not only benefiting from the extended technology cycle, other key sectors of Vietnam also have good results. Personal consumption continued to recover, albeit slowly. Vietnam has also joined the group of countries that have opened their borders since mid-March 2022, creating conditions ready to revive the tourism industry. Fitch Ratings affirmed: “We expect Vietnam’s GDP growth to accelerate to 6.1% in 2022 and 6.3% in 2023, led by a recovery. of domestic demand, strong exports and high FDI inflows, especially in the manufacturing sector”.

Regarding inflation control, HSBC maintains its inflation forecast for 2022 at 3.7%, still below the SBV’s 4% target. “Fortunately, Vietnam’s inflation is still basically under control compared to other emerging markets, in the context of food prices and price pressure due to demand has been basically under control,” the report said. reported by HSBC.

The remaining countries in the region are forecasted to grow 4.8% under the base scenario and 4.2% under the bad scenario. More importantly, under the worst-case scenario predicted by the World Bank, it is possible that an additional 6 million people in the region will continue to be stuck below the poverty line at $5.50/day in 2022. in Ukraine is threatening asynchronous recovery in developing countries in East Asia and the Pacific after the shock of the epidemic.

READ MORE:  Vietnam attracts over 15 billion USD of FDI in first half of 2021


News related