Vietnam’s economy hit hard by Covid-19 pandemic, but shows resilience
Vietnam’s government reported that the country’s gross domestic product (GDP) grew 2.58 per cent in 2021, slowing from a 2.91 per cent expansion in 2020, according to data released on December 29.
While the growth compares well to a median estimate of 2.2 per cent by analysts and lies above the government’s forecast of 2.5 per cent, it is still on the lowest level in 30 years and shows how hard Vietnam’s economy has been hit by the Covid-19 pandemic.
The General Statistics Office in Hanoi said fourth quarter growth was at 5.22 per cent, but the annual figure was dragged down by a contraction of 6.02 per cent in the third quarter.
“The complicated situation of the Covid-19 pandemic since the end of April seriously impacted commercial and service activities… pulling down the growth of the service sector and the whole economy,” the office said in a statement, but it added that “the nation’s economic growth is a great result given that the pandemic had seriously affected all sectors of our economy.”
“Huge impact” of pandemic lockdowns
For at least three months, almost the entire country was in complete lockdown, with a huge impact on production, supply chains, domestic consumption and export-oriented businesses, the office noted.
Looking forward, Vietnam’s economy is expected to accelerate its recovery from the pandemic in 2022 with momentum coming from the travel and tourism industries, increasing domestic demand and government stimulus measures, pending developments surrounding the spread of the Omicron virus variant, the office said.
Hopeful outlook for the coming years
While several issues that Vietnam faced in 2021 are likely to continue into 2022, the country’s government has forecast GDP growth of six to 6.5 per cent in line with its economic plan for 2021-2025 which focuses on the digital economy, hi-tech industries, development of the urban economy, stronger regional connectivity and the role of key economic zones, as well as a general restructuring of the industry to achieve a green and sustainable economy, among others.
Vietnam is also likely to remain a strong candidate for investment from the Association of Southeast Asian Nations, wider East Asia and internationally, given its investor-friendly policies, relative economic and political stability, cost efficiency and growth in consumer demand from a growing middle class. Pledged foreign direct investment for 2021 alone was up 9.2 per cent year-on-year despite the Covid-19 restrictions, according to government figures.
Vietnam’s government reported that the country's gross domestic product (GDP) grew 2.58 per cent in 2021, slowing from a 2.91 per cent expansion in 2020, according to data released on December 29. While the growth compares well to a median estimate of 2.2 per cent by analysts and lies above the government’s forecast of 2.5 per cent, it is still on the lowest level in 30 years and shows how hard Vietnam’s economy has been hit by the Covid-19 pandemic. The General Statistics Office in Hanoi said fourth quarter growth was at 5.22 per cent, but the annual figure was...
Vietnam’s government reported that the country’s gross domestic product (GDP) grew 2.58 per cent in 2021, slowing from a 2.91 per cent expansion in 2020, according to data released on December 29.
While the growth compares well to a median estimate of 2.2 per cent by analysts and lies above the government’s forecast of 2.5 per cent, it is still on the lowest level in 30 years and shows how hard Vietnam’s economy has been hit by the Covid-19 pandemic.
The General Statistics Office in Hanoi said fourth quarter growth was at 5.22 per cent, but the annual figure was dragged down by a contraction of 6.02 per cent in the third quarter.
“The complicated situation of the Covid-19 pandemic since the end of April seriously impacted commercial and service activities… pulling down the growth of the service sector and the whole economy,” the office said in a statement, but it added that “the nation’s economic growth is a great result given that the pandemic had seriously affected all sectors of our economy.”
“Huge impact” of pandemic lockdowns
For at least three months, almost the entire country was in complete lockdown, with a huge impact on production, supply chains, domestic consumption and export-oriented businesses, the office noted.
Looking forward, Vietnam’s economy is expected to accelerate its recovery from the pandemic in 2022 with momentum coming from the travel and tourism industries, increasing domestic demand and government stimulus measures, pending developments surrounding the spread of the Omicron virus variant, the office said.
Hopeful outlook for the coming years
While several issues that Vietnam faced in 2021 are likely to continue into 2022, the country’s government has forecast GDP growth of six to 6.5 per cent in line with its economic plan for 2021-2025 which focuses on the digital economy, hi-tech industries, development of the urban economy, stronger regional connectivity and the role of key economic zones, as well as a general restructuring of the industry to achieve a green and sustainable economy, among others.
Vietnam is also likely to remain a strong candidate for investment from the Association of Southeast Asian Nations, wider East Asia and internationally, given its investor-friendly policies, relative economic and political stability, cost efficiency and growth in consumer demand from a growing middle class. Pledged foreign direct investment for 2021 alone was up 9.2 per cent year-on-year despite the Covid-19 restrictions, according to government figures.
