Vietnam 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 on the Wall Street Journal (WSJ).
According to the author, Megha Mandavia, after the tough years of 2020 and 2021, Vietnam spent much of 2022 in the sweet spot – still-low inflation and rapid growth.
Times will get a bit tougher now, but the country is poised for fast growth next year – Natixis is forecasting 6.5%, while Capital Economics expects more than 7% – and the weakening currency may help soften the blow from weaker export demand.
The article assessed that the situation could get even trickier for Vietnam if the world slides into a recession. However, thanks to investments in infrastructure, aggressive trade liberalisation and relatively cheap wages, its manufacturing engine remains intact.
Vietnam also has the advantage of starting from an enviable growth position: roaring at 13.7% year on year in the third quarter of 2022 on the back of strong exports to the US.
The author noted that the country has also been partly insulated from the global surge in food prices – it is among the leading rice producers and exporters globally.
The Financial Times (the UK) recently published an article appreciating the economic performance results that seven countries, including Vietnam, have achieved in the context of the global economy is facing a lot of difficulties and challenges and bleak prospects.
According to the article, in the current gloomy economic period when experts predict recession and inflation in most countries, there are still some economies that record positive developments, which stand in contrast to the overarching pessimistic picture.
Among the prominent economies are Vietnam, Indonesia, India, Greece, Portugal, Saudi Arabia and Japan. What these economies have in common is relatively high growth, moderate inflation, or high stock market returns compared to other economies.
Thanks to strong investment in infrastructure for export production and opening of the economy, Vietnam is growing by nearly 7%. This is the fastest growth rate in the world.
With the remaining economies on the list, the article also provides analysis and comments on the factors that help each country avoid the global economic recession.
Although it does not exclude the possibility that the positive economic performance of the “7 economic wonders” may reverse due to geopolitical uncertainties around the world, the article still emphasizes that amid global concerns about economic situation, there are still some positive economies.
Similarly, Japan’s Nikkei website said that Nikkei’s latest COVID-19 recovery index shows that Vietnam and Cambodia lead Southeast Asia in terms of recovery from the COVID-19 pandemic.
After ranking 100th in the rankings first published in July 2021, Cambodia and Vietnam have made a “spectacular” transformation, rising to the top 10 for 4 consecutive months. Some ASEAN countries also increased their rankings compared to a year ago.
The Nikkei index evaluates 121 countries and regions for COVID-19 infection control, vaccination deployment and social mobility. High rankings mean high resilience, low infection and mortality rates, high vaccination rates, and easy travel.
The Nikkei October Index is the final release as some data sources will no longer be updated. Many countries have also changed their regulations on testing and reporting, which also makes it difficult to secure data for accurate assessment.
Figures collected over the past 15 months show that even countries experiencing severe outbreaks can turn the tide, first with vaccinations, and then with easing of control measures over the COVID-19 epidemic.
The governments of Vietnam and Cambodia have lifted COVID-19 control measures and fully reopened their borders to international tourists.
These moves have helped the two countries achieve a brighter economic outlook. In its latest economic forecast report, the World Bank (WB) raised its growth forecast for 2022 for Vietnam to 7.2% from 5.3% and Cambodia to 4.8% from 4.5%. The WB also raised the growth rates of Malaysia and Thailand to 6.4% and 3.1% respectively.
Two other Southeast Asian countries dropped in the latest rankings. Laos dropped to 89th place from 79th in September 2022, while the Philippines dropped to 101st from 97th. Both countries performed well in vaccination campaigns. As of the end of September 2022, the Philippines also had a high mortality rate.
In 2020 and 2021, despite impacts of the pandemic, Vietnam maintained positive growth, mainly thanks to increases in import-export and investment, especially foreign direct investment. Following better COVID-19 control, a strong recovery was recorded in a number of industries, such as retail, personal goods, pharmaceuticals, logistics, and forestry./.