Vietnam's economy set for strong rebound amid global economic uncertainty

“The renewed COVID-19 outbreak hindered Viet Nam’s economic recovery, tightened the labor market, and disrupted manufacturing and supply chains in 2021,” said ADB Country Director for Viet Nam Andrew Jeffries. “The high vaccination rate enabled the government to abandon harsh containment measures. This timely shift of the pandemic containment strategy helped restore economic activity and reduce bottlenecks in the business environment.”

Viet Nam’s economy grew by 2.6% in 2021. 

A recovering labor market, along with monetary and fiscal stimulus measures of the Government’s Economic Recovery and Development Program, will spur industrial growth by a projected 9.5% in 2022. Agriculture output is expected to grow 3.5% this year, on revived domestic demand and rising global commodity prices. 

The re-opening of tourism in mid-March and easing of pandemic controls are expected to boost services, with the sector forecast to grow by 5.5% this year. Accelerated public funding disbursements will drive construction and related economic activities. In tandem with the economic revival and the uncertainty of global oil prices, inflation is expected to accelerate to 3.8% in 2022 and 4.0% in 2023.   

Improved coordination between the central and local governments and restored labor mobility will continue to build domestic and foreign investor confidence. The Regional Comprehensive Economic Partnership, which came into effect on 1 January 2022, is expected to accelerate trade recovery once the COVID-19 pandemic subsides, forming stable and reliable export markets for Viet Nam.   

The Asian Development Outlook 2022 also highlighted near-term downside risks that could cloud Viet Nam’s recovery. The high COVID-19 infections since mid-March, if not abated, could obstruct the economy’s return to normalcy this year. A slowing global recovery and a surge in global oil prices from the Russian invasion of Ukraine would affect Viet Nam’s external trade and inflation. Recovery also depends on the government’s speedy and effective rollout of the economic recovery and development program./.