national 5
January 3-9, 2022 l www.vir.com.vn
A rebound in trade and
domestic production is
expected to continue driv-
ing the Vietnamese econ-
omy in the new year, after
it reaped positive growth
in 2021, with an expected
top position in ASEAN in
economic performance for
2022. Khoi Nguyen reports.
E
xperts and the govern-
ment highlighted many
encouraging outcomes
reaped in the macroeco-
nomic picture in 2021 last week,
when they assessed the economic
situation for the year.
“Thanks to the government’s
flexible policies on controlling
COVID-19 and ensuring social
security, and the great consensus
and solidarity of all units, agencies,
and localities, as well as the shar-
ing and support of enterprises and
all people from all walks of life,
economic activities in Q4 and the
whole 2021 have been bouncing
back,” said Nguyen Thi Huong,
general director of the General Sta-
tistics Office (GSO).
According to the GSO, the
economy is estimated to grow 5.22
per cent on-year in Q4, higher than
the on-year 4.61-per-cent rise in
the corresponding period last year.
The growth rate for the whole
of 2021 is estimated to be 2.58 per
cent – with the rate of 4.72 per cent
for Q1, 6.73 per cent for Q2, and
-6.02 per cent for Q3 due to serious
resurgence of COVID-19, which
made heavy dents in all sectors of
the economy and forced many key
economic hubs in the nation to halt
production and business activities.
In 2021, the growth rate was 2.9
per cent for the agro-forestry-fish-
ery sector – responsible for 13.97
per cent of economic growth, 4.05
per cent for the industrial and con-
struction sector – creating 63.8 per
cent of economic growth, and 1.22
per cent for the service sector –
holding 22.23 per cent of economic
growth.
“[Vietnam’s] economic condi-
tions continued to improve. Both
industrial production and retail
sales registered a third month of
growth,” said the World Bank in
its December bulletin on Viet-
nam’s economic situation. “Mer-
chandise exports hit a record high
of $34.5 billion in December,
helping maintain a third consecu-
tive month of trade surplus while
foreign direct investment (FDI)
commitment recovered after a
brief dip in October.”
Trade bouncing back
Figures from the GSO showed
that after six months of consecu-
tive trade deficit, Vietnam’s trade
balance returned to a trade sur-
plus, beginning from October.
This is quite a positive signal for
the economy’s gradual recovery
which will help the economy to
reach higher growth in 2022, at
Overcoming hardships by
boosting trade and production
Economic growth forecasted for 2022 and 2023 in ASEAN
5.3 5.2
3 3.3
2.4
6-6.5 per cent as expected by the
National Assembly.
In October, the total export-im-
port turnover hit $55 billion, up
2.4 per cent over September, with
a trade surplus of $2.74 billion.
In November, the figure reached
$59.7 billion, with a trade surplus
of $100 million, and in Decem-
ber, the respective figures stood at
$66.5 billion and $2.54 billion. All
these figures are over those in the
same period last year.
The export-import turnover for
the whole of 2021 hit $668.5 bil-
lion, up 22.6 per cent on-year. In
which the export and import val-
ues totalled $336.25 billion and
$332.25 billion, up 19 and 26.5 per
cent on-year, respectively. The to-
tal trade surplus stood at $4 billion.
The key contributor to the trade
surplus in 2021 is foreign-invested
enterprises. Their total export-im-
port turnover was $465.72 billion,
including $247.54 billion in export
turnover (including crude oil ex-
ports) – up 21.1 per cent over the
same period last year, and $218.18
billion in import turnover – up 29.1
per cent on-year. These compa-
nies’ 2021 trade surplus hit $29.36
billion.
According to the GSO, the
biggest driver of Vietnam’s export
turnover is the shipment of mobile
phones and their spare parts, which
fetched $57.54 billion, up 12.4 per
cent on-year. In Vietnam, Samsung
accounts for over 90 per cent of the
export turnover of these products.
The group has invested over $17.7
billion in Vietnam.
Samsung and many other man-
ufacturers of computers, laptops,
and many other electronic prod-
Unit: per cent
6.3
5.6 5.2 5.3 5.4 5.4
ucts, such as LG, Canon, and Intel,
have exported these products with
a total turnover of over $51 billion
in 2021, up 14.4 per cent as com-
pared to that in 2020.
“The socioeconomic situation
in Vietnam has steadily recovered,
and witnessed encouraging prog-
ress over the past months, as the
pandemic is fundamentally under
control and the economy is gradu-
ally reopened,” stated Prime Min-
ister Pham Minh Chinh. “The con-
fidence of investors and enterprises
are also increasing.”
In 2021, total registered FDI
hit $31.15 billion, representing an
on-year rise of 9.2 per cent, and
disbursed capital touched $19.74,
down 1.2 per cent on-year.
In Q4, the number of newly es-
tablished businesses reached more
than 31.400 registered at over $18
billion, employing 205,100 new la-
bourers. These are up 70.4 per cent
in the number of enterprises, 64.1
per cent in capital, and 24.7 per
cent in labourers, all on-year.
“Thus, just two months of im-
plementing the government’s Res-
olution No.128/NQ-CP dated Oc-
tober 11 on provisional guidelines
on safe adaptation to the pandemic,
enterprises’ registrations in the re-
maining months of the year have
flourished,” said Huong of the
GSO.
“The current hardships are
just temporary and the Vietnam-
ese economy, with its solid mac-
roeconomic foundation and stable
major balances, is still capable of
offering vast potential, advantages,
and drivers for future growth,” PM
Chinh stressed.
Global analysts FocusEconom-
7 7.3
6.5
5.9 6.3
5.1
2.1
ics told VIR in a statement that
production, especially in industrial
and processing activities, has been
strongly increasing since October
when the government began to ease
social distancing.
In 2021, Vietnam’s added value
for industrial production increased
4.82 per cent on-year, up from the
on-year climb of 3.36 per cent in
2020. In which, that of the man-
ufacturing and processing sector
creating 80 per cent of industri-
al growth climbed 6.37 per cent
on-year, higher than the on-year
expansion of 5.82 per cent in the
same period last year. Electricity
production and distribution rose
5.24 per cent on-year, also higher
than the on-year ascension of 3.92
per cent in 2020.
“Looking ahead, industrial pro-
duction is projected to accelerate
in 2022 from this year’s estimated
level, as the pandemic abates and
associated restrictions are eased,”
stated FocusEconomics. “More-
over, the underlying strength of
Vietnam’s industrial sector remains
intact: Vietnam is an attractive low-
cost base for manufacturing firms,
including those looking to relocate
from China due to the US-China
trade tensions.”
FocusEconomics estimates that
industrial output will grow 9.2
per cent in 2022, and 9.4 per cent
in 2023.
Rosy projections
FocusEconomics said, “The
economy is estimated to grow
at the fastest rate in the region in
2022, following 2021’s projected
solid expansion. Higher growth
in consumer and capital spending,
6.9
4.1
Source: FocusEconomics
combined with a robust external
sector, should boost activity in
2022. Our panellists expect GDP
to expand 7.3 per cent in 2022, and
6.9 per cent in 2023.”
The Asian Development Bank
has assumed that if the pandemic is
brought under control and full vac-
cination cover 70 per cent of the
population by the second quarter of
2022, the growth forecast for 2022
will be 6.5 per cent.
The World Bank also released
its prediction on Vietnam’s eco-
nomic outlook, saying that the
economy could expand by 6.5-7
per cent from 2022 onwards.
This new projection assumes
that the current outbreak will grad-
ually be brought under control,
allowing the economy to bounce
back.
According to the World Bank’s
fresh bulletin, the policy of living
with COVID-19 will involve con-
tinued vigilance and fast action by
the authorities, both in vaccination
and in social distancing, testing,
and quarantining.
“There is also a clear need for
fiscal policy support to boost pri-
vate demand and help the domestic
economy recover. Providing finan-
cial assistance to impacted workers
and households would be an essen-
tial avenue to achieve this objec-
tive,” said the bulletin.
“Given the available fiscal
space, and difficulties registered in
implementing the budget in 2021,
another policy option for consider-
ation is a reduction in value-added
tax for 2022 to support private con-
sumption. Continued close moni-
toring of the financial sector is also
warranted.”n