Some forecasts of the Vietnamese economic system in 2022

Vietnam’s GDP progress this yr might be above 6.5% if excessive world inflation might be introduced underneath management, US Federal Reserve’s (Fed) rate of interest hike roadmap on schedule and economies world wide are absolutely open.

Economist Dr. Vu Dinh Anh predicts Vietnam’s economic system will quickly get better and return to its pre-pandemic progress price as a result of steady macroeconomic fundamentals in 2021.

A restoration based mostly on steady macroeconomic fundamentals

The import-export sector made essentially the most of export alternatives for items price US$336.31 billion in 2021, a 19% bounce year-on-year. Of this quantity, home exporters earned US$91.09 billion, or 27.1% of whole export gross sales.

That export earnings confirmed a comparatively excessive progress price, Anh mentioned, had a optimistic influence on the commerce steadiness, present account steadiness and steadiness of funds.

Concerning value regulation actions, Anh argued that value stability of important items amid disrupted manufacturing and provide chains has helped Vietnam carry its inflation price all the way down to much less. by 2%.

As well as, Vietnam’s overseas change reserves price over $100 billion and a weak appreciation of the dong in opposition to the US greenback of round 1% have contributed to macroeconomic stability and introduced inflation underneath management for the pandemic.

Concerning fiscal and financial insurance policies, Anh mentioned that the simultaneous implementation of insurance policies together with cuts in lending charges and social assist price tens of trillions of dong whereas sustaining management of public debt and financial deficit was elementary to the success of the trouble. to assist the economic system climate the storm.

Equally, Nguyen Xuan Thanh, senior lecturer on the Fulbright College of Public Coverage and Administration, mentioned persistence in pursuing prudent fiscal coverage and growing help to individuals and companies by financial coverage helped Vietnam stabilize the macroeconomic scenario regardless of the catastrophic penalties of Covid19.

“Regardless of the financial coverage formulated to offer better help aid, macroeconomic indicators remained steady and inflation was utterly underneath management, which was completely totally different from what occurred 12 years in the past,” Thanh mentioned at a convention titled “A Evaluation of Vietnam’s Financial system in 2021 and Prospects for 2022” held final week.

Professor Hoang Van Cuong, vice-rector of the Nationwide College of Economics, argued that the fast vaccination price and the choice to alter the technique to battle the pandemic have helped Vietnam keep its socio-economic actions at a comparatively regular tempo whereas 1000’s of infections had been nonetheless being reported per day. . This effort allowed the economic system to get better within the final quarter of final yr after a unfavorable progress price.

“In 2021, Vietnam once more achieved good price range assortment outcomes and maintained a suitable price range deficit,” Cuong mentioned. “Moreover, the agricultural manufacturing was fruitful as a result of the costs had been good. All of the macroeconomic fundamentals have been mastered. These elements have helped to consolidate investor confidence in Vietnam and additional enhance the attraction of overseas funding.

Expectations for exports, overseas direct funding (FDI) and financial rescue packages

Nguyen Xuan Thanh mentioned export will proceed to be the principle driver of Vietnam’s economic system this yr.

He defined that Vietnam is now in a really favorable place in the case of export profile and a various record of world companions.

As well as, Vietnam will profit extra from the shortage of products globally because of the disruption of provide chains.

“For those who may keep manufacturing, perhaps you can export your merchandise,” Thanh mentioned. “You possibly can see that final yr, Vietnam’s exports to all markets had been on the rise.”

Agreeing with Mr. Thanh, Dr. Le Duy Binh, Managing Director of Economica Vietnam, predicted that the restoration of Vietnam’s main buying and selling companions, akin to the US, the European Union, Japan, South Korea South and China, will create nice alternatives for her. services and products.

Furthermore, Vietnamese enterprises have acquired the flexibility to adapt and keep manufacturing and supply providers within the context of the pandemic. This capability, based on Binh, might be acknowledged by way of whole overseas commerce of 668.54 billion US {dollars} in 2021, an annualized enhance of twenty-two.6%.

Concerning export prospects in 2022, Mr. Thanh estimated the expansion price of whole export gross sales at 14% in comparison with 2021, offered that the scarcity of products globally persists within the nation. first half of this yr. After that, the export might face extra challenges when the financial tightening coverage is in place, forcing individuals to avoid wasting extra.

Le Duy Binh mentioned overseas traders will retain their confidence in Vietnam once they evaluate efforts to stabilize the macroeconomic scenario and the federal government’s dedication to enhance the funding and enterprise surroundings.

As of December 20, 2021, the whole registered capital of FDI in Vietnam – together with new registered capital, capital enhance and capital in mergers and acquisitions – stood at 31.15 billion USD, registering a progress price 9.2% in comparison with final yr.

Along with the 2 progress engines above, consultants nonetheless base their hopes on the financial rescue plans adopted by the Nationwide Meeting.

In response to Nguyen Xuan Thanh, decreasing the speed of worth added tax may be very efficient. The speedy implementation of this coverage shortly had an influence on individuals’s livelihoods, he mentioned.

“A coverage that isn’t a burden will quickly come into being,” he defined. “Moreover, when the coverage units no circumstances for beneficiaries, its influence might be felt instantly.”

Dr. Vu Dinh Anh argued that the two% discount in VAT on many merchandise topic to a ten% price will influence all transactions available in the market. Producers and distributors is not going to have to boost their costs amid elevated strain on manufacturing prices.

Additionally, based on Mr. Anh, the coverage of decreasing the VAT price will assist management the patron value index (CPI) when home consumption recovers. Such a tax discount will assist the federal government to attain two targets, that are to assist financial progress by each manufacturing and consumption, and to stabilize the macroeconomic scenario and management inflation.

Concerning the two% rate of interest help package deal, Anh mentioned it’s a new method because the authorities solely cite those that usually are not beneficiaries as a substitute of naming beneficiaries solely.

“It’s a new method as a result of it isn’t solely clear, clear and consistent with worldwide practices, but in addition helpful for implementation,” he mentioned.

In the meantime, Hoang Van Cuong predicted that this coverage could have an enormous affect on companies. The VND 40 trillion that will likely be spent by the federal government to assist rates of interest will impact VND 2 trillion of capital for companies.

Nonetheless, Cuong warned that policymakers ought to pay extra consideration to enterprise households and small and medium enterprises, these unable to get better with out capital and credit score assist.

“These debtors are barred from conventional credit score phrases as a result of they do not have property to make use of as mortgages or have non-performing loans,” he mentioned. “If the efficient situation stays compliance with mortgage necessities, these debtors will likely be eradicated.”

In response to Cuong, policymakers ought to transfer from management coverage utilizing credit score circumstances to a brand new method wherein banks go hand in hand with companies. On this case, the banks should take note of the true goal of the debtors.

“If companies get loans to purchase supplies, banks pays them straight so companies can obtain the supplies,” he urged. “Then the manufacturing and consumption of merchandise within the firms involved ought to be monitored in order that the loans might be repaid.”

Cuong mentioned the strategy may help banks higher handle loans by controlling money flows as a substitute of mortgages, and provides firms and enterprise households that truly do enterprise an opportunity to learn from authorities insurance policies.

As for the debtors, they are going to use the loans to recycle manufacturing whereas financial institution deposits, inventory market investments and the true property market will quickly be introduced underneath management.

Supply: Saigon Instances

Government must carefully manage financial support for businesses: experts

Authorities should rigorously handle monetary assist for companies: consultants

Consultants say the federal government must rigorously monitor and outline financial restoration plans to assist firms affected by the pandemic to revive the nationwide economic system shortly.

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