A shift in Vietnam’s Covid-19 response towards safe living with the pandemic in late 2021 proved vital for the country to recover and continue to adapt to a new normal.
| Garment production for export at Garment 40 Company in Thanh Xuan District, Hanoi. Photo: Hai Linh |
“It is safe to say that business performance has gone from strength to strength since the introduction of Resolution No.128 on safe and flexible adaptation to the pandemic,” National Assembly deputy and Vice-Principal of the National Economics University (NEU) Hoang Van Cuong told The Hanoi Times.
This was proven by the country’s GDP growth in the fourth quarter at 5.22%, which helped boost the full-year economic expansion of 2.58%.
In this process, Cuong said Resolution No.128 allows local authorities to move from the previous “zero Covid-19” to reopening socio-economic activities during the pandemic.
“The most important point in the resolution is guaranteeing the operation of businesses in any Covid-19 circumstance as long as they fully comply with anti-Covid-19 measures,” he noted.
According to Cuong, the issuance of a resolution with clear and consistent criteria for all provinces/cities nationwide demonstrated the Government’s willingness for businesses to act on their own depending on the actual situation.
“As a result, the economic recovery process would be much faster,” he added.
Sharing the same view, Former Director of the General Statistics Office (GSO) Nguyen Bich Lam pointed out the strong performance of all macro-economic indicators since a change in the Covid-19 approach.
Lam said the agro-forestry-fishery continued its upward trend and made a significant contribution to the overall growth, while the manufacturing and processing sector, a key driver of the economy, posted high growth of 7.96% in the fourth quarter and 6.37% for the whole year.
In addition, Vietnam’s trade turnover at a record high of US$668.5 billion in 2021 was no doubt a highlight, as the result ensured Vietnam’s positive trade balance for the sixth consecutive year with $4 billion, Lam told The Hanoi Times.
Creating momentum for 2022
Such strong socio-economic results in 2021 would serve as a springboard for Vietnam’s economy to further expand this year, Cuong from the NEU said.
He, however, warned of the complicated Covid-19 situation, especially with the emergence of the Omicron variant, as well as uncertainties surrounding the socio-economic situation.
“In addition to fighting the pandemic and boosting economic growth, Vietnam is facing a huge challenge in laying the foundation for long-term recovery,” Cuong suggested.
Among solutions to ensure strong economic growth, Cuong urged the Government to stand firm in the path of reopening the economy in association with Covid-19 containment.
Another key priority would be to soon complete the vaccination program for all eligible groups and enhance the capabilities of the preventive health system, which Cuong said would be the right direction for Vietnam to move forward.
“It is worth saying that Vietnam’s key economic advantages have not changed, such as political stability, quality workforce, low production cost, and the presence of numerous free trade agreements,” he added.
In a context when many countries are facing the same Covid-19 situation as Vietnam, Cuong expected this could be an opportunity for Vietnam to “once again become attractive and solidify its presence in the global supply chains.”
Director of the Institute of Branding and Competition Strategy Vo Tri Thanh noted last year, the FDI commitments to Vietnam rose by 9.2% to $31.15 billion, seen as a key indicator of the strong confidence of foreign investors for Vietnam’s business environment, he told The Hanoi Times.
“The Vietnamese economy is on track to regain the growth rate of over 6.5% GDP growth in 2022 thanks to the inflows of FDI and positive trading prospects,” Thanh said, referring to the expectation that the FTAs that Vietnam signed in the past two years, including the EVFTA, UKVFTA, or RCEP, would start “bearing fruits”.
“Vietnam’s new infrastructure systems would also drive the economy forward as the Government is shifting the economic model from the one based on cheap labor cost and natural resources to one with a high concentration on science-technology,” he added.
“Given the target of the digital economy contributing 25% of the GDP growth by 2025 and 30% by 2030, Vietnam’s economy is set for sustainable development in the future,” Thanh said.
Vietnam’s GDP growth target of 6-6.5% in 2022 is feasible in case the country could put the pandemic under control and ensure the balance of aggregates demand and supply. Given Vietnam’s ratio of public debt to GDP of 44%, lower than the threshold of 60% set by the National Assembly, Vietnam still has room to continue exercising further fiscal policy to stimulate demand, said World Bank Lead Economist and Program Leader for Vietnam Jacques Morisset. |
