According to a new report of World Bank (WB), Vietnam’s economy will grow to 7.5% this year. Vietnam’s economy has recovered in the past 6 months due to resilient and strong manufacturing and services. The report indicated “Vietnam’s economy grew 5.2% and 5.1% in the fourth quarter of 2021 and in the first quarter of 2022 respectively due to high consumer spending and large increased number of tourists international visitors”.
In 2022, the Vietnamese government targets to have a growth rate at 7%, but the recent published report is a positive sign for Vietnam. The forecast is based on the assessment and recovery of Vietnam’s economy in the past six months It is surprising to see Vietnam’s economy growth increases sharply from 2.6% in 2021 to 7.5% in 2022. Ms. Carolyn Turk, WB director of Vietnam, predicts that Vietnam’s GDP growth will continue to be positive in the second half of 2022 and 2023. However, Vietnam faces domestic and international challenges that would slow its economic recovery.
Vietnam would face risks in term of inflation and slow econmic growth from its key export business partners such as USA and China. In addition, the global commodity price and supply chains were disrupted by the war in Ukraine and new variants of COVID would emerge.
Ms Carolyn Turk also stated further “if major economies and key export markets such as the United States, the EU zone and China declines more sharply than expected, Vietnam’s exports may continue to be affected.” Vietnam also faces domestic challenges include labor shortages, inflation and risks in the financial sector.
In its recent business forum talk, Forbes Vietnam magazine has invited an expert discussing the inflation and other matters affects Vietnam’s economy. Nguyen Xuan Thanh, lecturer at Fulbright Business Public Policy School suggested Vietnam will control the inflation target of 4% which was set out by the Vietnam National Assembly at the beginning of 2022 and the inflation will by controlled this year.
He analyzed the inflation rates from other countries around the world would affect Vietnam. Specifically, the red band has an inflation rate of 8.6-9.6% including the US and Europe; brown band from 7-7.7% including Thailand, Cambodia, India; yellow band 5.6 -6.1% including Korea, Singapore and the Philippines and blue from 2.4-4.4%.
Vietnam’s economy will get positive signs but Vietnam needs to have careful approach to deal with international and domestic factors that would affect its economy growth rate in 2022.