Don't miss the "economic recovery train"

Promoting growth for 2022, on January 4, the National Assembly held the first extraordinary session, the XV National Assembly. At this session, the National Assembly held an online meeting to consider and approve four urgent contents, "national plan, people's livelihood" for early economic recovery.

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Initiation of recovery and growth plans

Before the return and prolonged outbreak of the Covid-19 pandemic, in 2021, all socio-economic activities of Vietnam will be greatly affected. Facing many unprecedented challenges, the Party and Government promptly issued many policies to support and promote economic development, production and business in order to realize the dual goal of "repelling the pandemic and preventing the spread of the virus", economic development, safe adaptation, flexibility, effective disease control.

In 2021, GDP will only increase by 2.58% compared to 2020, the industrial production index will increase by 4.8%, the realized social investment capital will increase by 3.2% and the average consumer price index (CPI) will increase slightly increased 1.84%.

In the general assessment of 2021, Ms. Nguyen Thi Huong, General Director of the General Statistics Office said that the domestic socio-economic situation still maintained growth and achieved success.

The positive results in all fields are due to the participation of the whole political system along with the implementation efforts of all levels, sectors, localities, the business community and people nationwide.

Positive growth in 2021 is an important foundation for Vietnam's economy to recover in the new normal in 2022. However, the economic recovery process in 2022 will face many challenges that need to be resolved.

The Central Institute for Economic Management (CIEM) said that in order not to miss the pace of economic growth recovery, the requirement for Vietnam is to quickly control the pandemic, and soon bring production activities to the next level, trading on the "new normal".

The situation of attracting FDI in 2022 is forecast to improve thanks to Vietnam's ability to control the disease, the recovery of global direct investment and the prospect of international economic integration. Specifically, many FTAs ​​with regions and strategic partners (such as EVFTA, RCEP) will be an opportunity for Vietnam to attract more projects and investors from other continents to invest in many fields along with the trend of supply chain shifting.

In 2022, it is forecast that imports and exports will grow at 13-15%, of which exports will increase by about 13-15%, imports will increase by 11-13%, mainly due to the control of the pandemic and vaccine coverage. Demand on the global and domestic scale continues to increase, the economic recovery is better.

In order to take advantage of new opportunities for Vietnam's economic recovery in 2022, CIEM believes that it is necessary to implement a number of solutions.

Specifically, Vietnam needs to deploy a large-scale vaccination campaign for the entire population. At the same time, we combine fiscal and monetary policies, focusing on fiscal policies to support businesses and individual business households to overcome difficulties. Improving the capacity of disbursement and efficient use of investment capital and effectively restructuring the economy. In addition, it is also necessary to proactively prepare conditions to promote production and business, ensure supply and circulation of goods, and reduce inflationary pressure.

At the same time, strengthen the implementation of digital transformation in institutional reform and administrative procedures. Creating an inter-connection policy, connecting supply chains of goods and services with consensus at local governments, ensuring the maximum circulation of goods and labor to serve the recovery of products.

Five industry groups "leading the way"

Commenting on the risks to the Vietnamese economy in 2022, Jacques Morisset, World Bank Chief Economist in Vietnam, said that the biggest risk is that the pandemic continues to evolve with the appearance of new variants, most recently the Omicron variant of the SARS-CoV-2 virus.

Besides, Vietnam is an open economy, it will depend on the situation of many other countries. The export sector has been Vietnam's growth engine for many years, and the slowdown in the world economy will have a significant impact on Vietnam's economy.

Assessing Vietnam's growth momentum in 2022, according to the World Bank, Vietnam remains an attractive destination for investors in the medium term. Vietnam's strong foundational conditions will help investors hedge against short-term fluctuations caused by Covid-19. Domestic consumption and public investment will still play an important role in recovering economic growth in 2022.

According to Mr. Nguyen Xuan Quang, Deputy Director of the National Center for Socio-Economic Information and Forecast (NCIF), Ministry of Planning and Investment, the forecast for Vietnam's economic recovery in 2022 and the following years is very difficult and complicated because the pandemic situation has put us in a new context.

In particular, with the foreign factor, according to the WB's calculation, the forecast is about 4.9% less optimistic, but there will be positive signals from the opening of countries, which will support the recovery, goods, and global investments. In 2022, the economic "guided" industries are classified into five specific industry groups.

Firstly, the group of materials and construction, because the whole country is focusing on promoting public investment, will focus on infrastructure construction, innovation and digital development.

The second is a group of industries with a large proportion of exports such as electronics, textiles, seafood, wood and wood products, rubber, iron and steel, food, etc., due to the increase in world consumption demand. The increase in import demand will be an opportunity for Vietnam to boost exports.

The third is that the beverage, retail, and airline industries will recover due to increased domestic demand.

Fourth is the e-commerce and logistics group, because people's online shopping in the context of the pandemic has also changed drastically, continuing to grow in 2022.

Fifth, the information technology industry group will recover with the business software, equipment and services segment.

"The great potential of digital banking channels opens the trend of technology investment and digital transformation in the banking sector, which is increasing in both speed and scale," said Mr. Quang.