Bright prospects for the Vietnamese economy in 2023

Bright prospects for the Vietnamese economy in 2023

Despite the geopolitical and economic instabilities that have occurred in several regions of the world, in 2022, Vietnam achieved growth of 8.02%, a record not seen since 1997.

>> Publication of the report “The economy of Vietnam in 2022 and the outlook for 2023“

>> Vietnam’s economy is open and full of vitality

>> The fulcrum of the acceleration of the Vietnamese economy in 2023

Vietnam’s foreign trade in 2022 is estimated at 732 billion USD, up 10% from 2021.
Photo: VNA/CVN

This rate is the highest in Asia-Pacific, found the major international financial institutions, including the World Bank (WB), the Asian Development Bank (ADB) and the International Monetary Fund (IMF).

But according to them, in order to continue this growth rate in 2023 and to resist exogenous impacts, the Vietnamese government will have to be more flexible in its macroeconomic governance.

A strong rebound in 2022…

At the height of the coronavirus crisis, the government put in place numerous response and support measures for businesses and individuals, allowing them to resume productions.

But according to Michael Kokalari, chief economist of the VinaCapital fund, if Vietnam has done so well, it is because it has been able to protect its two growth levers: exports and foreign direct investment (FDI).

Indeed, taking advantage of the geopolitical changes that have occurred in the world, Vietnam has been able to raise its export rate and attract FDI. While China maintained its “Zero COVID” policy and its companies had to pay additional taxes imposed by the United States, Vietnam rolled out the red carpet for foreign companies that wanted to relocate their production chains, explained the economist .

Singapore’s has ranked Vietnam among the fastest growing economies in Asia in 2022. 8.02 percent is the highest level of growth achieved by the country since 1997, CNN confirmed.

With admirable growth, low inflation, impressive exports, a stable political environment and brilliant diplomacy, Vietnam is emerging as one of the few bright spots in a bleak picture of a world entering recession and mired in multiple crises, commented Sputnik (Russia).

In 2022, Vietnam’s import-export volume exceeded 700 billion USD, and the country maintained its place among the top 30 trading countries and territories of the World Trade Organization.

… and the challenges to be met in 2023

In 2023, however, Vietnam should no longer escape the turbulence of the global market. Indeed, the rise in inflation causing a drop in demand in Vietnam’s main markets, its export sector could be penalized. The country should also feel the consequences of instabilities in the stock, financial and real estate markets.

“The global market is increasingly unpredictable. Exchange rates are unstable and the price of energy is skyrocketing, as are the prices of raw materials and real estate. However, the disbursement of Vietnamese public investments is proving slow and inefficient. There is a need for more flexible measures to maximize results,” said Andrew Jeffries, AfDB Country Director in Vietnam.

“The Vietnamese government has promulgated directive policies which are relevant at the central level. But during their application at the local level, the authorities have encountered institutional blockages. In order to meet this challenge, it is imperative to give more autonomy to local authorities. The executive has the task of monitoring and examining their work”proposed Ahmed Eiweida, economist of the WB.

The WB has forecast growth of 6.7% in 2023 for Vietnam, a figure higher than the 6.5% set by its government. With regard to exports, the country will continue to rely on agri-food and textiles. By pursuing its reforms, it will continue to attract foreign investors.