International Media Highlights Vietnam's Potential Growth Opportunities For Investors

According to EFT Trends, EM countries can provide potential growth opportunities for investors who do their due diligence. EM investing can come with its own nuances, particularly because each country’s performance can vary with respect to their economic stability.

The COVID-19 pandemic certainly roiled a lot of EM opportunities in 2020, but certain countries that were able to respond swiftly muted its economic effects. Vietnam, for example, was able to rebound from the pandemic due to a quick, pointed response by its government.

“Vietnam’s recovery is set to gather momentum in 2022, as domestic demand rebounds and export performance remains strong, says Fitch Ratings,” a Fitch Ratings article says. “Improving levels of vaccination should reduce the risk that the recovery is set back by further Covid-19 outbreaks. However, the evolution of the pandemic remains subject to uncertainties, in particular as daily cases have trended higher in recent months.”

The Vietnamese economy is predicted to recover in 2022. (Photo: VNA)

According to Vietnam Plus, Fitch Ratings forecasts growth ahead for Vietnam in 2022. Economic effects related to the pandemic don’t appear to be as severe, thanks to the government’s move to increase vaccinations in the country.

In its recent report, Fitch said that improving levels of vaccination in the country should reduce the risk that the recovery is set back by further COVID-19 outbreaks. However, the evolution of the pandemic remains subject to uncertainties, in particular as daily cases have trended higher in recent months.

“We expect growth to accelerate to 7.9 percent in 2022 and 6.5 percent in 2023 as the recovery becomes established,” the article cited Fitch Ratings as saying.

“Vietnam has also had less economic scarring than many emerging markets, as it is one of the few countries that did not experience an annual contraction in GDP amid the pandemic shock.”

Illustrative image (Source: VNA)

Fitch’s current forecasts see Vietnam's public debt/GDP ratio broadly stable over 2022-2023, at around 41 percent of GDP. Since this forecast, the government has approved a fiscal stimulus package covering the period, worth around 15.3 billion USD (roughly 4 percent of 2021 GDP), but Vietnam’s debt/GDP level will remain below the peer median of 56.6 percent in 2022 and 56 percent in 2023, it noted.

The package continues certain tax breaks and exemptions, which will weigh on the revenue base, but these may be rolled back as the recovery strengthens. It also contains additional infrastructure spending that could help to underpin medium-term growth prospects, Fitch commented.

Photo: Fitch Ratings

In a resolution on the socio-economic tasks to be accomplished in 2022 and financial outlays, as Vietnam News reported, the Government has designated it as a year of economic recovery. Efforts made by both foreign and domestic enterprises will play a key role in achieving the goals.

"I can say Vietnam remains in a great position to attract foreign investments in many, many industries. I think Vietnam will probably see an increase in foreign investments in 2022. As in past years, international investors all want simplicity and transparency.

With these two elements promoted by the Government, we will no doubt see more investors coming into the country. The legal system probably can modernize and support this movement. I believe then foreign investors will feel confident and look at Vietnam as the preferred place for investment", Patricia Marques, general manager of Starbucks Vietnam said.

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