Viet Nam outpaces countries in Asia regarding growth rate: WSJ
VGP – Viet Nam will likely be among Asia's fastest growing economies next year, despite a weaker currency and falling foreign reserves, according to a recent article published in the Wall Street Journal (WSJ).
The author, Megha Mandavia, said that "Viet Nam is far ahead of the rest of Asia" regarding growth, US dollar reserves and monetary policy.
The article assessed that Viet Nam could get even trickier if the world slides into a recession. However, thanks to investments in infrastructure, aggressive trade liberalization and relatively cheap wages, its manufacturing engine remained intact.
Viet Nam also has the advantage of starting from an enviable growth position: roaring at 13.7 percent year on year in the third quarter of 2022 on the back of strong exports to the US.
Additionally, Viet Nam did not appear to be affected by the global food price storm as it is one of the leading rice producers and exporters globally. According to the author, after the tough years of 2020 and 2021, Viet Nam spent much of 2022 in the sweet spot, with still-low inflation and rapid growth.
Times will get a bit tougher now, but the country is poised for fast growth next year. Specifically, Natixis forecasted 6.5 percent, while Capital Economics expected more than 7 percent - and the weakening currency may help soften the blow from weaker export demand.
In the recently released "Economic Outlook for Asia - Pacific" report, The International Monetary Fund (IMF) also stated that Viet Nam had been a bright spot in the region in post-pandemic recovery thanks to sound monetary policy, timely fiscal support and strong external demand.
Viet Nam was one of the few economies that the IMF raised its growth forecast to 7 percent this year, instead of 6 percent as previously forecast.
Meanwhile, with the global economic context increasingly gloomy, the IMF lowered its growth forecast for the Asia-Pacific region to 4 percent this year and increased to 4.3 percent next year.