Insights
M I NH HANH
Maintaining growth momentum in 2022 Despite the complicated development of the pandemic in 2021, Vietnam’s GDP maintained a positive growth momentum, with inflation controlled at the lowest level in the last 6 years, and FDI attraction recovering. This has laid solid foundations for the economy to rebound strongly in 2022. POSITIVE HIGHLIGHTS Given the serious and complicated impacts of the pandemic on all aspects of socio-economic life, Vietnam's economic picture in 2021 showed bright spotlights. GDP maintained a positive growth momentum at an encouraging level in the context of the complicated pandemic. GDP growth in 2021 reached 2.58 percent - lower than last year and is the lowest level in the past 10 years. Inflation was at the lowest level in the last 6 years. The average CPI in 2021 increased by 1.84 percent compared to 2020, mainly due to low consumer demand and slow cash flow. Import and export turnover reached a record level in the context of the world and domestic economic difficulties, and trade surplus. In 2021, the total
export and import turnover of goods grew well, reaching USD668.5 billion, up 22.6 percent over the previous year. In which, export turnover reached USD336.3 billion, an increase of 19 percent compared to the previous year; import turnover hit USD332.2 billion, up 26.5 percent. Trade balance saw a surplus of USD4 billion. The exchange rate was stable, interest rates decreased and remained low, and the banking system's operation was stable thanks to the active and flexible monetary policy of the State Bank. The USD/VND exchange rate saw mixed fluctuations as the interbank rate decreased by 1.1 percent while the central rate increased by 0.1 percent compared to the beginning of the year. Deposit interest rates decreased, creating conditions for credit institutions to further reduce lending rates. Lending rates (both existing and new loans) decreased by 0.5-2 percent/year, substantially supporting businesses. In 2021, credit institutions: (i) restructured the repayment term, keeping the debt group unchanged for about 630,000 customers affected by the pandemic with outstanding loans of over VND285 trillion (USD12.6 billion); (ii) exempted, reduced interest rates for over 1.96 million customers, with total outstanding loans of more than VND3.82 quadrillion (USD168.3 billion); (iii) provided new low-interest loans of over VND7.2 quadrillion (USD317.2 billion) so far for 1.2 million customers. Digital transformation, science and technology development, and
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B I D V r e vi e w
innovation made great strides. The Covid-19 pandemic, besides the negative impact, also created a "push" that promoted the strong development of Vietnam's digital economy. According to the E-conomy Report (2021), Vietnam ranks third in ASEAN and 14/50 in Asia in terms of digital economy scale. Vietnam's digital economy is estimated to reach USD21 billion in 2021 (about 5.8 percent of GDP), up 31 percent compared to 2020. Regarding e-commerce, Vietnam's market size in 2021 is estimated at USD13 billion, up 53 percent compared to 2020, becoming an important distribution channel of goods in the context of the pandemic. Regarding e-payment, the growth of payment value via Internet, mobile, and QR Code channels increased by 29 percent, 88.3 percent, and 129 percent, respectively - among the highest in the
