KB Securities Vietnam forecasts that Vietnam’s economic growth this year will reach 6.3%, inflation will still be well controlled at 3.8%, commodity price fluctuations have divergence.
In the latest report, KB Securities Vietnam (KBSV) economic growth in 2022 reached 6.3%.
Three growth supporting factors include domestic consumption and recovery of manufacturing and processing activities; exports continue to benefit thanks to the roadmap to join FTAs, world consumer demand recovers after the epidemic and transport costs cool down; FDI inflows return.
Public investment is expected to continue to be the driving force supporting economic growth. According to the Government’s report, the state budget investment capital expected to be balanced in 2022 is VND 526,100 billion (up 10.2% compared to the 2021 plan).
The government has set a target that the actual/planned disbursement rate will be over 90%. KBSV expects that the Government will have plans to accelerate the disbursement of public investment in 2022 because promoting public investment is the fastest and feasible option to support the economic recovery soon.
According to the General Statistics Office, if public investment increases by 1% over the same period last year, GDP will increase by 0.058%.
In addition, social distancing measures have been eased, helping to remove travel difficulties and improving the progress of implementing backlog projects.
KBSV also mentioned the expectation that exports will continue to maintain growth for 2022. One of the driving forces is the price of export goods, especially Vietnam’s strong products (iron and steel, agriculture, forestry and fishery, etc.) rice…) is on the rise, which is an important driving force to increase export value. There are also factors such as the reopening of major economies leading to an increase in the demand for imported goods and services; signed FTAs are gradually taking effect.
Regarding FDI prospects, the report said that with the epidemic baseline scenario being well controlled, foreign investors’ confidence will gradually be restored as Vietnam is still an ideal destination thanks to favorable factors. thanks to the large number of signed FDA agreements, ideal geographical location, young population structure, and supportive policies of the Government.
Talking about risks, KBSV believes that the slower recovery of domestic consumption and production due to the 4th outbreak of the epidemic may slow down the strong growth of GDP in 2022.
“The slow recovery of consumption after the 4th wave of COVID-19 makes us cautious about the pace of consumption recovery in 2022. Besides, consumer spending in Vietnam will not be able to increase sharply. as strong as Western countries (Africa, Europe, and Latin America), because Asian people in general, including Vietnamese, have prudent spending habits after the pandemic,” the report stated.
In addition, the company also expects the restaurant service and tourism industry to recover in 2022 thanks to the reopening of domestic and international routes and the return of domestic tourism from the first quarter of this year. IV/2021.
Regarding inflation, although there are some risk factors that increase inflation pressure next year, but KBSV believes that Vietnam’s inflation is still well controlled at 3.8% for the whole year 2022.
Commodity price movements are divergent, especially in the energy group, which is more inclined to increase and remains at a high level.
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