ADB: Viet Nam to expand at 6.5% in 2022
VGP - Viet Nam’s economy is forecast to expand 6.5% in 2022 and 6.7% in 2023—a rebound made by high COVID-19 vaccination coverage and introduction of economic recovery and development program (ERDP), according to the Asian Development Bank (ADB).
|GDP growth rate|
|Forecast for 2022||6.5|
|Forecast for 2023||6.7|
As of 22 March, 79.4 percent of the country's population aged 18 and above were fully vaccinated and 47.5 percent had received booster shots. The high vaccination rate allowed the Government to abandon harsh and disrupting containment measures. This timely shift of the pandemic containment strategy helped restore economic activity and reduce uncertainty in the business environment.
The international lender also quoted a General Statistics Office's survey of business trends in processing and manufacturing which shows that 81.7 percent of respondents believe the production and business situation will be better in 2022. The economy grew by 5.0 percent in Q1 2022, up from 4.7 percent in the same quarter last year.
On 11 January, the National Assembly endorsed combined monetary and fiscal measures estimated at US$15 billion to implement the ERDP in 2022 and 2023.
The ERDP's monetary measures will provide additional liquidity to the economy through an expected reduction in the lending rate by 0.5 percent–1.0 percent by credit institutions over this year and next and the continued implementation of credit relief measures until the end of 2023.
However, ADB predicted that Viet Nam's recovery is clouded by major near-term downside risks including high COVID-19 infections since mid-March, a slowing global recovery, and a surge in global oil prices, uncertainties in the global financial markets, and the withdrawal of monetary and fiscal accommodation by advanced economies would weaken the dong.
By the end of Q1 2022, average inflation increased to 1.9 percent from 0.3 percent in the same quarter of 2021./.