Foreign investors maintain an optimistic outlook for Vietnam’s economic growth next year though the country suffered a challenging 2021 as it was hit hard by the pandemic, according to an article posted on the website Vietnam Briefing of Dezan Shira & Associates.
Workers put final touches on garment for export to the EU at a factory in Thai Nguyen province (Photo: VNA) - Foreign investors maintain an
optimistic outlook for Vietnam’s economic growth next year though the country
suffered a challenging 2021 as it was hit hard by the pandemic, according to an
article posted on the website Vietnam Briefing of Dezan Shira &
Associates.
The writing considered Vietnam’s free trade agreements (FTAs) as a pull factor that investors can bank on,
noting that the country has used its participation in FTAs as an instrument to
ensure increased economic power and financial security. This will ensure that
Vietnam’s economic development will continue to shift away from exporting
low-tech manufacturing products and primary goods to more complex hi-tech goods
like electronics, machinery,
vehicles, and medical devices.
The implementation of the EU - Vietnam Free Trade Agreement (EVFTA) last year is an example of this.
Besides, the Regional Comprehensive Economic Partnership (RCEP), which will officially come into force on
January 1, 2022, can help local firms increase exports and attract high-quality
goods for its consumers. In addition, the country is set to benefit from the
demand for its exports like agriculture and fisheries products.
Mergers
and acquisitions (M&A) are likely to
continue to play a key role in Vietnam’s economy in 2022. While in 2020,
M&A activities were disrupted due to the pandemic, in the first nine months
of 2021, M&A deals with total disclosed value have already totalled 3
billion USD.
As Vietnam hopes to recover its economy, further robust M&A activity
can be expected in 2022, especially when the government has also eased some
requirements in the investment and enterprise laws to facilitate M&A deals,
according to the article.
Due to the pandemic, the government unveiled several support packages
for businesses and individuals to help spur the economy, the writing said,
suggesting businesses should prepare for 2022, using these government measures
to improve cash flow.
In addition, the easing of entry procedures and work permit requirements
should help businesses and employees enter Vietnam for job opportunities.
Regarding tourism - a major contributor to the economy, from 2022, the
government plans to allow international arrivals that are fully vaccinated to
self-quarantine at home or their places of accommodation as long as they test
negative. The Ministry of Culture, Sports, and Tourism has proposed that the
Prime Minister consider restoring visa exemption for tourists who stay in
Vietnam for less than 15 days. In addition, nine international flight routes have
been given the green light to resume commercial flights.
In its conclusion, the article said 2021 brought significant challenges
for many businesses in Vietnam who had to deal with local market developments
along with concerns plaguing global supply chains exacerbated by the pandemic.
Several issues that the country faced in 2021 are likely to continue into 2022.
Nevertheless, it added, a more targeted and focused development in key
areas of the economy will present more opportunities for growth, particularly,
in areas that help prop up Vietnam’s bottom line of economic stability and
people’s livelihoods.
While Vietnam has suffered, its economy is on course to record positive
growth in 2022. For the next year, it remains a strong candidate for investment
from ASEAN and beyond. Given its investor-friendly policies, relative economic
and political stability, cost efficiency, and consumer demand prospects, the
country is likely to continue gaining from supply chains restructuring in Asia
in addition to attracting a new range of investors in terms of geography and
sectors, according to the writing./.