Illustrative photo (Source: VNA)Per the article, 2021 was a tough year as shutdowns madelife difficult and GDP slowed to 2.6 percent. Increasing supplies of vaccineseventually allowed more normal activities in the last few months of the year.Vietnam’s GDP shrank 6 percent in the third quarter before bouncing back in thefourth quarter.
According to the author, despite factory closures, exportsrose 19 percent in 2021 to an astonishing 336 billion USD, while GDP was only 271billion USD in 2020 and grew only slightly in 2021. The high level of foreigndirect investment (FDI) did not grow nor shrink much.
The article noted that prospects for Vietnam in 2022 aregood. As factories and services approach normal, there will be a jump in output.Most projections are for 6–7 percent real GDP growth. Tourism should start torecover from its over 95 percent decline from 2019 levels. Exports should growabout 15 percent and the trade balance will remain modestly positive. Inflationwill remain low and the VND will continue to appreciate slightly against theUSD.
The author also pointed out that one side effect ofVietnam’s rapid export growth has been a lag in domestic value-added inexports. Much of the work has been simple assembly rather than the developmentof a dense network of supplier industries that would make the FDI ‘stickier’ aswages rise and labour supplies tighten. The COVID-19 pandemic slowed progresson this front, as fewer new enterprises opened and many more temporarilyclosed. Many firms that are still in business are financially weaker and willneed time to accumulate resources to improve machinery, training and marketing./.
VNA
