International organizations hold optimistic view on Vietnam economic outlook

Standard Chartered Bank has become the latest name among foreign economic institutions making positive forecasts on Vietnam’s GDP growth with an expansion rate of 6.7% for this year, and 7.3% in 2022. 

Production of electronic products at Meiko Vietnam. Photo: Thanh Hai

HSBC in its April report also expected the country’s economic growth to stay at 6.5% in 2021, while Fitch Ratings even put it at 7%.

Tim Evans, CEO of HSBC Vietnam, highlighted the huge interests from foreign businesses in Vietnam when he addressed over 300 firms from the UK participating in a recent webinar jointly hosted between the bank and the Foreign Investment Agency to promote the trade opportunities between the two countries.

According to Evans, the strong participation of UK businesses is the evidence that many are considering Vietnam as an attractive investment destination, and the government would again put this fourth Covid-19 outbreak under control just like previous flare-ups.

Since the emergence of Covid-19, the brand of Vietnam has further been rising in the eyes of investors, he noted.

Sharing the same view, Director of Fitch Ratings in Asia Pacific Sagarika Chandra said the rating agency forecast a positive outlook for Vietnam’s economy in the medium term despite the current Covid-19 situation in the country.

Chandra referred to Vietnam’s strong export performance and growing foreign direct investment (FDI) inflows in the first five months of this year, adding Vietnam’s business environment has been improved compared to those of countries in the same rating bracket.

These factors should drive Vietnam’s economy going forward in the medium term, she added.

Meanwhile, General Director of Standard Chartered in Vietnam Michele Wee said the progress of the Covid-19 vaccination program should be the key factor influencing the country’s economic performance in the near future.

Wee said a faster vaccine roll-out would reduce pressure on the banking sector as its program of freezing and waiving interest payments for customers is coming to an end by late 2021, in turn exposing weaknesses in the quality of banks assets.

Evans from HSBC Vietnam also warned slow vaccination program could limit foreign investors’ access to Vietnam’s market, especially as FDI attraction has been a strong point of the economy so far.

This year, the Vietnamese government set a growth target of 6.5%, a significant improvement from the 2.91% growth recorded in 2020.