In 2020, Vietnam was held up as a model for its ability to curb the initial COVID-19 outbreak, with discipline and social support for strong measures. However, this has changed in 2021, when the country has experienced a surge of cases since April, driven by the Delta variant. The extensive lockdowns to prevent the spread of the coronavirus have disrupted not only local consumption but also impacted the manufacturing and supply chain activities to export markets. Vietnam’s economic damage due to Covid 19, included in the two years, 2020 & 2021, is estimated at 847 trillion VND, equivalent to 37 billion USD.
Although the virus has followed a far more severe course than expected, the economy has sailed through the storm and outperformed expectations. In particular, GDP regained positive growth in the fourth quarter after having suffered from an unprecedented contraction in the third quarter of -6.17%, affecting businesses and their people significantly. Meanwhile, the country already reached its trade turnover target of 670 billion, in which, exports are more than 336 billion USD, while imports are over 332 billion USD and attracted a significant amount of FDI capital. These indicators have proved the resilience of Vietnam’s economy amid the coronavirus pandemic.
Vietnam still expects a positive GDP and as the government switches to a ‘living with the pandemic’ strategy, further economic gains can be expected. Most banks and international institutions still maintain strong business sentiment followed by positive GDP growth in the foreseeable future.
Barring any major disruptions such as those from the Omicron variant, Vietnam is likely to move towards a more “normal” economic expansion of 7.4% in 2022, higher than the Government’s targets of 6-6.5%. As we wrap up 2021, we look at positive notes of Vietnam’s economic performance, which is further likely to shape Vietnam’s business environment in 2022.
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Positive notes on Vietnam’s economic performance in 2021– HSP Consulting
