Substantial recovery for Vietnamese economy in 2022

The latest data released by the General Statistics Office (GSO) shows the GDP growth rate during the 2011 - 2022 period reached 6.41%, 5.50%, 5.55%, 6.42%, 6.99%; 6.69%; 6.94%; 7.47%; 7.36%; 2.87%; 2.56%, and 8.02%, respectively.

Nguyen Thi Huong, general director of the GSO, attributed this strong rebound to the Government’s drastic measures, including the implementation of the socio-economic recovery and development programme, thereby leading to stable macro-economy with inflation brought under control and major balances guaranteed.

Sharing this perspective, Deputy Minister of Planning and Investment Tran Quoc Phuong emphasised the growth rate for 2022 should have been higher if there were not many difficulties in the fourth quarter of the year.

The GSO statistics showed the country’s total import-export turnover has for the first time surpassed the US$700 billion mark, bringing in US$732.5 billion this year, an increase of 9.5% over the previous year. Vietnam has also recorded a trade surplus for seven consecutive years, with the figure rising to US$11.2 billion.

Most notably, all three key economic sectors have enjoyed strong recovery, with agro - forestry – fishery expanding 3.36%, industry and construction 7.78%, and services 9.99%.

Despite securing a spectacular economic recovery, think tanks predict Vietnam will endure numerous challenges over the course of next year.

Deputy Minister Phuong pointed out that there will be a number of difficulties occurring in export markets, particularly as the country’s major foreign economic partners face the risk of recession. Meanwhile, local businesses must also deal with hurdles related to the capital and real estate markets, and cash flow.

The Deputy Minister also revealed that the country’s export turnover has decreased in recent months, with November and December recording declines of 8.4% and 14%, respectively.

Businesses operating in the garment, footwear, agriculture, fisheries, and furniture sectors anticipate that export orders will fall sharply in the opening months of 2023, even until the end of the second quarter of next year, he said.

Phuong expressed his concern as Vietnam’s Purchasing Managers' Index (PMI) in November fell to 47.4 points, indicating that local businesses face many difficulties in signing new orders.

In the fourth quarter of the year, the Industrial Production Index (IIP) only increased by 3% over the same period from last year, while December’s IIP is estimated to decline by 1% compared to the previous month and only increase by 0.2% year on year.

Major financial institutions such as the Asian Development Bank (ADB), the World Bank (WB), and the Hong Kong Shanghai Banking Corporation have warned about challenges facing the country’s export next year, saying the Vietnamese economy is required to rely on public investment and domestic consumption.

More than VND700,000 billion of public investment is set to be pumped into the economy in 2023 that will continue to fuel economic recovery and support exports, helping the economy to fulfill its 6.5% growth target.

Deputy Minister Phuong expressed his belief that China moving to relax anti-pandemic measures would facilitate Vietnamese exports to the northern neighbour moving forward.