Driving Forces for Vietnam's Economic Growth in 2022: Insights from Foreign Economists

Vietnam's Economic Outlook and Growth Drivers

In an interview recently granted to the Vietnam Investment Review, lead specialist and group head for the ASEAN+3 Macroeconomic Research Office (AMRO) Luke Hong said Vietnam is a trade-oriented economy so the manufacturing sector will be one of its major drivers of growth.

Provided that Vietnam can curb the pandemic and minimize travelling restrictions, particularly for factories and workers, Vietnam's manufacturing sector will continue benefiting from a recovery in external demand, resulting in output expansion, even amid the pandemic, he said.

According to Hong, the service sector is another key to achieving a 6-6.5 per cent growth this year. Asked about AMRO’s policy recommendations for Vietnam to ensure strong growth, he said Vietnam needs to provide greater fiscal support, particularly micro-small, small and medium-sized enterprises and low-income households. Such support should be reviewed periodically to ensure its suitability and effectiveness.

Policy Recommendations for Strong Growth

Hong also suggested accelerating the disbursement of public investment capital to propel economic growth, especially when the pandemic weighs on the demand of the private sector. In his view, the expansion of debt restructuring scope and extension of loan risk provision period is extremely important to ease pressure on borrowers and protect the balance sheets of banks during the economic recovery. He said structural reform should be promoted, and more efforts are needed to develop support industries, thus enhancing Vietnam’s participation in the global value chain and improving the added value of its economy.

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Optimistic Growth Outlook

Meanwhile, World Bank’s lead economist and leader of the Macroeconomics, Trade and Investment Programme for Vietnam Jacques Morriset expressed his belief that the 6-6.5 growth target for 2022 is completely feasible.

In an interview granted to the Dau Tu, Morriset said he is optimistic about the prospect of the Vietnamese economy on two conditions that the Government will well control fiscal policy and the economy will not be shut down again due to the pandemic.

At the same time, opportunities abound, first of all in the field of export, he said, elaborating that 80 per cent of exporters in Vietnam are foreign-invested ones, who came to Vietnam to diversify their supply chains.

Green economy in adaptation to climate change also offers plenty of chances, Morriset said, citing the development of solar energy as an example of Vietnam’s success in seizing opportunities in this field. According to him, Vietnam can do the same with wind power, battery and other green products.

Reference: Vietnam Insider