Vietnam’s GDP growth may hit as high as 6.9% in 2022, as the economy stands firm in the recovery process.

Production of car components at Kefico Vietnam (Dai An Industrial Park, Hai Duong Province). Photo: Huy Hung

This was among the two growth scenarios set out by the Central Institute of Economic Management (CIEM) and put forth at a conference held today [July 15].

“The growth rate would be in line with the Government’s target of 7% set for this year,” said CIEM Director Tran Thi Hong Minh.

In an optimistic scenario, the country’s inflation would stay around 3.7%, below the Government’s target of 4%, export growth would hit 16.3%, and a trade surplus would reach US$2.7 billion.

Meanwhile, a baseline case would Vietnam's GDP growth at 6.7%, while inflation at 4%, export expansion at 15.8%, and trade surplus of $1.2 billion. 

Minh noted since early 2022, the Vietnamese Government has been adopting a “living with Covid-19” policy, which results in easing Covid-19 restrictions on socio-economic activities and stepping up  the vaccination drive.

"The government has made clear the priority of stabilizing macroeconomic conditions and containing inflation. Among the measures to be followed is the acceleration of public investment and support for vulnerable social groups in the transition period to the new working environment," Minh said.

Vietnam’s GDP growth during the first six months of 2022 stood at 6.42% year-on-year, higher than the 5.74% rate in the same period of 2021, and equivalent to the pre-pandemic time in the 2016-2019 period at 6.38%.

The positive economic performance has also exerted positive impacts on the labor market, with the number of the labor force rising by 600.000 in the second quarter to 51.6 million.

Economic reform remains key

Head of CIEM’s Macroeconomic Policy Department Nguyen Anh Duong added Vietnam’s economic prospects would largely depend on the capability of keeping new Covid-19 variants and other health crises under control and maintaining macroeconomic stability.

“Vietnam should focus on diversifying export markets and taking advantage of free trade agreements to navigate the current difficult global economic environment,” he added.

Duong also called for a cautious approach in dealing with rising inflationary pressure.

“The most important task is to contain inflation and ensure a stable macro-economic environment,” he said, noting this would allow Vietnam to continue pursuing the much-needed institutional reform.

According to Duong, monetary and fiscal policies alone are not enough to support rapid and sustainable economic growth.

“Vietnam should accelerate economic reform even during the recovery process, as this would relieve pressure on inflation and create new development space for the business community,” he continued.