Trade and investment remain Vietnam’s economic saviours: US expert

(VOVWORLD) - After two years curtailed by COVID-19 and marked by GDP growth of between 2 per cent and 3 per cent, Vietnam’s economy made a strong comeback in 2022, wrote Professor David Dapice of Harvard University on
He wrote that protections forecast real GDP growth of about 7.5 per cent for 2022, slowing down from the 8.8 per cent GDP growth seen in the first nine months of the year.

Exports from January through to November 2022 grew more than imports — with growth of 13 per cent for exports and 10 per cent for imports — so there is a modest trade surplus. Tourism has rebounded from 2021’s low levels, supporting strong growth in the service sector.

Manufacturing and industry grew by nearly 9 per cent through to the end of November — a slower rate than earlier in the year.

According to Professor David Dapice, there are strengths to offset these challenges. Fiscal policy has been restrained. With a few exceptions, most Vietnamese banks are in a strong position with adequate capital.

Foreign direct investment into the manufacturing sector will also support growth and add to the structural transformation of the economy. Meanwhile, participation in trade agreements is giving Vietnam access to world markets.

In 2023, it is anticipated that the drivers of the economy will no longer be exports or even consumer spending, which has seen 15 per cent growth during 2022. Instead, a further rebound in tourism as China unwinds its COVID-19 protocols along with sharp increases in government investment are intended to catapult Vietnam’s economy towards a target of 6.5 per cent GDP growth.