In 2022, the aftermath of the pandemic and the fuel price crisis due to the conflict in Russia and Ukraine caused a global economic slowdown and recession in many countries. Nevertheless, the Vietnamese economy has proven to be robust and has also emerged as a strength in the regional and global economy, mainly due to the government's management strategies.
What are the cornerstones of the Vietnamese economy in 2022 and the Vietnam outlook for 2023? We will answer these questions in depth in this publication.
Despite the severe impact of the pandemic in the second part of 2021, thanks to the 'open up and live with Covid' strategy and the efforts of all localities in the business community and the population, Vietnam's production and business activities recovered rapidly in all sectors and managed to increase their competitive capacity both in the region and globally.
According to data from the General Statistics Office, Vietnam's GDP growth in 2022 increased by 8.02% compared to 2021, which is a record for the 2011-2022 timeframe.
Following you'll find some socio-economic indicators for 2022:
Other data to be considered for 2022 compared to the previous year:
It was also noted that at the macroeconomic level, the situation remained stable, with inflation under control at a rather moderate level. This was possible thanks to abundant domestic production and supplies (especially of agricultural products), which served as insulation against soaring global food costs and even helped to reduce pork prices.
In terms of foreign direct investment (FDI), Vietnam has attracted a considerable number, reaching a record of around USD 27.72 billion, indicating that foreign investors are increasingly optimistic about the country's socio-economic prospects.
Furthermore, it is worth noting that wholesale and retail trade, processing and manufacturing, and science and technology activities were the sectors with the highest number of newly registered projects, representing 30%, 25.1% and 16.3% of the total, respectively.
As for imports and exports, both performed exceptionally well in 2022. Vietnam's export value increased by 10.5% to USD 371.5 billion in 2022 compared to 2021, while imports reached a total value of USD 360.65 billion, representing an increase of 8.4% compared to the previous year.
The Vietnamese government has clearly defined its overall goals for 2023 to continue the focus on maintaining macroeconomic stability, containing inflation, promoting growth and ensuring a good economic balance.
Key indicators for 2023 include:
According to Deputy Minister of Planning and Investment, Tran Quoc Phuong, the GDP growth target of 6.5% for next year is based on the assessment that the Vietnamese economy is maintaining its recovery momentum and has a low risk of external shocks.
In general, the Vietnamese economy, like the world economy as a whole, is experiencing a period of transformation.
In 2023, energy, tourism, information technology and manufacturing are likely to be the key sectors for Vietnam's economic success, so their development will be crucial to the country's economic growth.
Although the economy has expanded at an accelerated pace in recent decades, Chairman of the Economic Committee of the National Assembly, Vu Hong Thanh, during a session held on 10 November 2022, said that in 2023 the Vietnamese economy and society will likely face various obstacles and challenges currently occurring globally and domestically, whereby some countries will experience declining growth or even fall into recession. In particular, as the Vietnamese economy is highly exposed to international patterns, it is likely to be partially affected by a number of multifaceted external effects.
Indeed, risks in the manufacturing, financial-monetary and real estate sectors persist globally. High-risk exposures in some economies therefore threaten both the monetary-financial and real estate sectors in Vietnam, as they have become largely intertwined in the global economy. In addition, 2023 will likely see price increases in some government-led items (basic wage, electricity prices, healthcare and education).
In order to deal with the imminent difficulties and achieve its goal, the government will be required to ensure that the banking system will adapt and remain resilient under all circumstances, and it will also need to try to keep inflation under tight control and adjust exchange and interest rates flexibly.
The government must also monitor risky capital markets, such as real estate, bonds and shares, and provide a legislative framework to regulate bitcoins and digital assets.
As far as Vietnam's manufacturing industry is concerned, it is still dealing with low-value divisions, its development is not yet at full potential, and labor productivity growth has not yet reached its target.
Nonetheless, in the wake of the last economic crisis, in which many companies experienced problems, this gave them the opportunity to take advantage of support programs and/or to pause briefly to upgrade their technology and improve their products, in order to move from a low value-added manufacturing industry to a high value-added industry.
Companies and investors are therefore now invited to reorganize themselves aggressively in order to accelerate digital transformation, cut costs, improve publicity, openness and professionalism, and better manage their risks.
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