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Vietnam’s GDP growth in 2022 predicted to reach 6.2%

Vietnam’s GDP growth in 2022 predicted to reach 6.2%

Tuesday 24, 05 2022
Considering a positive scenario, the GDP growth of Vietnam may reach 6.2%. This number is 5.2% in a worse scenario.

Growth scenarios

Representatives of the research team of the Institute for Vietnam institute for Economics and Policy Research (VEPR) recently presented the annual economic report of Vietnam 2022.

Dr. Tran Toan Thang - Head of Division at the National Center for Socio-Economic Information and Forecast (under the Ministry of Planning and Investment) - stated that based on the macroeconomic background of 2021 and the first quarter of 2022, the research team has calculated and proposed 3 scenarios for Vietnam's GDP growth in 2022.

Specifically, in a normal scenario this year, Vietnam’s economy will achieve a GDP growth of about 5.7%.

Vietnam’s economy

In a positive scenario, with the supply chain from China not interrupted due to the implementation of the Zero COVID policy, the economy will achieve a GDP growth of about 6.2%.

In the worst-case scenario, if the manufacturing supply chain is disrupted due to China's Zero COVID policy, the economy will grow only 5.2% this year.

According to Dr. Can Van Luc – a member of the National Financial and Monetary Policy Advisory Council, and Chief Economist of the Joint Stock Commercial Bank for Investment and Development of Vietnam, the biggest risk facing the world currently is inflation. 60% of US businesses surveyed expressed concern about inflation risks.

This year's global average inflation is forecast to be about 6.2%. Compared to 4.2% of the previous year, it is a terrible increase. Most central banks in the world have been forced to raise interest rates, which creates big consequences.

For Vietnam, Dr. Luc believes that inflation in 2022 would be double that of 2021, or more, about over 4%. The current difficulty is whether to raise interest rates or not. Increasing interest rates to tighten cash flow will control inflation. However, increasing interest rates will curb the overall growth of Vietnam’s economy, because capital for businesses will be tightened.

financial and the real estate market

In addition, Dr. Luc pointed out some other concerns with Vietnam's economy, including the fact that the quality of growth in the past two years has changed, and labor productivity is low, only increasing about 4-4.5 percent, which is much lower than previous years. Meanwhile, the financial and the real estate market has too many problems.

Hardship acknowledged

Deputy Prime Minister Le Van Thanh acknowledged that the economy faces the risk of high inflation pressure and the economic growth plan of 6-6.5% would be met with many challenges.

According to the Government's assessment, in the first months of 2022, the economy initially had a positive recovery in the new normal state. Total budget revenue in 4 months was 657,400 billion VND, up 15.4% over the same period in 2021. CPI in April increased by 2.64% over the same period in 2021, the lowest in the same period in the past 5 years.

By mid-May, credit increased by nearly 7.2% compared to the end of 2021 and increased by 17% in the same period last year. Violations on the stock market have been checked, monitored, and strictly handled, helping to ensure market discipline and discipline.

Vietnam had a trade surplus of 2.53 billion USD, an increase of nearly one billion USD compared to the same period in 2021. The additional registered FDI capital and capital contribution and share purchase in the first four months of the year increased nearly twice last year. Realized foreign capital also increased by nearly 8%, reflecting foreign investors' expectations for Vietnam's growth recovery.

Vietnam had a trade surplus

In 4 months of 2022, 80,500 enterprises were newly established and returned to operation, an increase of nearly 27% over the same period.

However, according to the Government, the economy has the potential for high inflation pressure when domestic demand recovers, and the economic growth target of 6-6.5% is a huge challenge.

Resonating with the increase in input import prices, especially gasoline prices, local labor shortages, transportation and logistics costs, supply disruptions from China, etc., will affect many macroeconomic indicators in 2022 and 2023.

 

Source: tuoitre.vn, vnexpress.net

Compiled by VietnamCredit

Categories
Vietnam Economy

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