Despite the destructive effects of COVID-19, Vietnam’s economy remains promising. After the long lockdown, Vietnam’s economic situation has seen a remarkable recovery. According to the Ministry of Industry and Trade (MOIT), Vietnam’s GDP in the last quarter of 2021 grew by 5.22%, which is higher than the same period of 2020 (4.61%). Furthermore, thanks to such a growing middle class, a clearly healthier business climate, enhanced access to markets, and the shift to relatively lower-cost nations for supply chains, Vietnam’s economic prospects have been aided for the long run.
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This article discusses the landscape of Vietnam’s economy: forecast for 2022, and the opportunities available in the country for foreign investors.
Vietnam Economy 2022: Forecast For Industrial Production
Vietnam is set to make a robust rebound in 2022. The World Bank is optimistic that the Vietnamese economy will grow at 6.5 – 7%. The forecast is based on the grounds that a sustained global recovery will create demand for Vietnamese products in territories like the U.S, the E.U., and China, which will cite solid recovery opportunities in manufacturing and domestic demand
Amid the rising cases of the Omicron virus in January 2022, Vietnam witnessed a spike of 2.4% (YoY) growth in industrial production. According to their econometric models, in the long term, the country’s Industrial Production will grow by 6.90% in 2022.
Vietnam’s Economy Is Expected To Make A Strong Comeback In 2022
The World Bank announced recently that it would provide USD 221.5 million in loans to help Vietnam recover from the pandemic, focusing on key policy measures, including lowering corporate tax burdens and boosting financial assistance to disadvantaged people.
The export sector is also set to make a strong comeback, as the manufacturing sector is heavily influenced by the FDI investment in the country. The consumer narrative in Vietnam will be driven by continued middle-class development and the increasingly wealthy sector, which will lead to shifts in consumption as Vietnamese begin to spend more on leisure activities.
Business opportunities in Vietnamese Economy in 2022
Fashion Industry: Young & Hungry
In Vietnam, the fashion industry has long enticed shoppers. In 2021, sales in the garment sector clocked USD 4,872 million. Moreover, Vietnam ranks 4th in the list of top garment manufacturing countries in the world making the country one of the most sought destinations for investment in the garments and textiles industry.
Booming Fintech Sector
The Fintech sector in Vietnam has tripled in size between 2017 and 2021. There are presently 203 companies in the country that offer a variety of services, such as digital payments, wealth management, and blockchain, to mention a few.
A Sea of E-Commerce Prospects
E-commerce Gross Merchandise Value (GMV) is expected to reach USD 56 billion, 4.5 times the value forecasted in 2021. Moreover, several recent surveys have indicated that Vietnam’s e-commerce market will have the highest growth rate in Southeast Asia by 2026.
A Hungry F&B Industry
As per a poll conducted by Business Monitor International Ltd, Vietnam has become one of the world’s top desirable food and beverage markets in 2019 (ranking 10th in Asia). Food and beverage items generated USD 42 million in sales in 2020, rising 3.8% from the previous year and accounting for 15.8% of GDP.
Renewable Energy: The way forward
To combat global warming, Vietnam has set a target of becoming carbon neutral by the year 2050 or sooner. Furthermore, annual power usage has spiked by more than 11%. This rising demand is driving an unquenchable need for more electricity, as well as a shift away from coal and investments in renewable energy.
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