07:11 03/02/2022

VinaCapital forecasts 7-7.5% growth

Tra My - An Nhiên -

Economy expected to recover quickly in 2022.

Photo: Illustration
Photo: Illustration

In its newly-released “Towards the future 2022” report, VinaCapital writes that Vietnam’s economy will recover quickly thanks to many factors being in its favor.

Analysts at VinaCapital estimate that GDP growth will rise sharply this year, from 2.6 per cent in 2021 to 7-7.5 per cent or even higher.

Growth will be supported by a strong recovery in domestic consumption and construction activity, as well as by tourists being permitted to visit certain destinations in the months to come.

More specifically, growth in Total Retail Sales (excluding the price factor) will increase sharply, to 5 per cent. Consumption, however, will still be about 10 per cent less than pre-Covid levels.

The growth of construction activity in Vietnam will also increase from 0.6 per cent in 2021 to 8 per cent in 2022 thanks to a boost in spending “offset” for infrastructure and the lessening of State regulation over real estate development.

The most important factor for growth is FDI. Inflows stayed positive over the past two years amid Covid. FDI in 2020 was only down 2 per cent, at about $20 billion, while the global decline was 40 per cent.

VinaCapital expects foreign capital flows to remain strong this year, especially as restrictions on movement are eased, creating easier conditions for leaders from Japan, South Korea, and other countries to come to Vietnam.