US paper: macroeconomic outlook of Vietnam bright
The macroeconomic outlook of Vietnam is bright as the country has witnessed strong domestic consumption, received foreign direct investments and maintained a surplus in trade balance with other countries, wrote an article recently published on the US’s seekingalpha.com.
Vietnam's real GDP growth is forecasted to exceed 8% in 2022. In a time when other major world economies are curtailing fiscal and monetary policy support in an effort to contain inflation, Vietnam is in a position to support its growth. In January 2022, Vietnam passed a fiscal stimulus package of US$15.4 billion at almost 4% of its GDP to support its 8% growth target for the year. The stimulus is generally viewed as a positive for the country's GDP growth trajectory for the year, it said.
Vietnam's currency and interest rates also appear relatively stable compared to other countries. A sharp recovery in personal consumption along with strong export growth contributed to the country's impressive Q3 GDP growth of 13.67%. Vietnam's strong macroeconomic position is expected to lift its population out of poverty as more than half of the Vietnamese population is projected to join the global middle class by 2035.
“The country has been able to remain attractive to foreign investors and received foreign direct investment (FDI) net inflows totaling US$15.3 billion in 2021, or 4.2% of GDP, up from 3.2% of GDP in 2013. We believe the strong FDI further solidifies the country's macro outlook”, the article said.
According to the author, Vietnam's regulators are vying for an upgrade to emerging markets status by global index providers. The State Securities Commission of Vietnam is working with global agencies such as the World Bank and FTSE as well as Vietnam's ministries, associations and market members to address concerns on foreign ownership limits.
The country's regulators are willing to make markets more accessible to foreign investors and boost the infrastructure support needed to run a healthy and functioning market. An upgrade to emerging markets status could potentially attract foreign active and passive asset inflows into the local Vietnamese market, it concluded.