The economic recovery across the South-East Asian region has been uneven and must now contend with rising external headwinds from outside the region.
Vietnam is predicted with a high growth prospect in the region, at more than 6.5% in 2022, 0.7% higher than the average growth of 5.8% for the whole region.
This was a key finding from the Economic Forecast presented by the experts at the Institute of Chartered Accountants in England and Wales (ICAEW) Economic Insight Forum Q2.
Vietnam was able to bounce back relatively quickly in 2021 compared to the rest of the region. With the easing of restrictions from last year’s Q4 that carried over to this year’s Q1, there has been a significant recovery in its services sector driven by domestic tourism.
With the current endemic phase, there should be a boost on the international tourism front as travellers return to Vietnam. Realised foreign direct investments inflow this year should also support construction performance and labour and achieve export capacity, which remains healthy.
The ICAEW report said that even though recovery across the Southeast Asian region had been uneven with the Delta COVID variant, GDP for Singapore, Indonesia, Malaysia, the Philippines, and Vietnam has risen back to pre-pandemic levels – except for Thailand, which is still at 2% below pre-pandemic levels as its tourism industry struggled with travel and mobility restrictions.
It was noted that Vietnam was not particularly affected by the Delta variant wave and hence did not experience large lockdowns that impacted its economy as much as Malaysia and the Philippines did.
On the other hand, Singapore was able to take advantage of the increase in demand for consumer electronics globally to increase its GDP growth by 7.6% last year.