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Despite the COVID-19 pandemic, international financial institutions have made positive predictions for Vietnam’s economy.
Growth prospect
Vietnam’s GDP in the 1st quarter of this year was 4.48% higher than last year, a testament to Vietnam’s adaptability and resilience. Vietnam’s ago-forestry, fisheries, industry, construction, and service sectors have prospered. Consumer demand has covered steadily. Inflation is under control and the budget is balanced. Monetary and credit markets are stable. Bank interest rates remain at a low level, and the foreign currency market is operating effectively. Online transactions and cashless payments have increased.
For the first time since the COVID-19 pandemic broke out, foreign investment has increased. Total foreign investment capital in the 1st quarter was over 10 billion USD, up 18.5% last year. New and supplemented capital are both higher than in 2019 before the pandemic.
Innovation, technology, and digital transformation are on the rise. The national population database has updated residential information while the national digital transformation program for businesses has updated 4,000 businesses.
Exports and imports in the 1st quarter were impressive. Total export-import turnover was over 150 billion USD, up 24% from last year. For the first time in 20 years, the VN-Index surged to 1,200 points.
Social security has been strengthened and Vietnam climbed 4 places in the UN’s global happiness ranking.
Optimistic forecast for Vietnam’s economy
Several international financial institutions have raised their forecast for Vietnam. The IMF says that despite COVID-19, Vietnam’s economy might grow 6.5% this year. Singapore’s United Overseas Bank raised its prediction for Vietnam's economic growth this year to 7.1%. HSBC Global Research expects a 6.6% surge in Vietnam’s GDP this year.
Fitch Ratings gave Vietnam a long-term foreign currency issuer default rating at 'BB' and raised Vietnam’s Outlook from “Stable” to “Positive”. Vietnam was one of very few countries in Asia-Pacific and the BB category to record positive growth (2.9%) during the COVID pandemic.
Fitch Ratings acknowledged Vietnam’s fiscal and public debt results and its government’s success in controlling the COVID-19 pandemic in its early stages and in recovering the economy.
The UK’s MoneyWeek said Vietnam will be one of Asia’s highest - potential markets in the future. The US’s Heritage Foundation placed Vietnam's economy in the ‘moderately free’ category in its 2021 Index of Economic Freedom, up 15 places from last year, thanks to an increase of 2.9 points for improved financial health.