Economic Indicators, FDI, and Trade Trends

Vietnam's Gross Domestic Product and 2022 forecast

While Vietnam was praised globally for managing the COVID19 pandemic in 2020, the Delta variant proved overwhelming causing strict lockdowns, interrupted production, and disrupted supply chains. Although most countries, especially in the west, suffered through a devastating 2020, Vietnam’s 2021 was difficult with the pandemic hitting Vietnam’s GDP significantly. In Q3 2021, Vietnam recorded its first-ever negative GDP since 2000, affecting businesses and people significantly. In 2021, the GDP growth was 2.58 percent.

The General Statistics Office (GSO) released economic figures and cited that Vietnam’s economy in Q1 2022 (January-March) expanded by 5.03 percent compared with the same period as last year. The growth however was down from 5.22 percent in Q4 2021. Nevertheless, the government agency further stated that Vietnam is on track for economic recovery.

Q1’s GDP structure was dominated by services at 41.70 percent followed by, industry and construction and 37.97 percent, and agriculture, forestry, and fishery at 10.94 percent.

Vietnam still expects a positive GDP and as the government switches to a ‘living with the pandemic’ strategy, further economic gains can be expected. While most banks and international institutions have revised their forecast for Vietnam’s GDP downward, they still maintain strong business sentiment followed by positive GDP growth in the foreseeable future.

For 2022, Vietnam’s government has forecast GDP growth of 5.5 – 6 percent.

Foreign Direct Investment trends

Foreign direct investment into Vietnam dropped 1.2 percent from a year earlier to USD 19.74 billion in 2021. However, the Foreign Investment Agency in Vietnam reported that the total FDI pledges i.e., new, adjusted capital and share purchases by foreign investors, reached 31.15 billion USD in December 2021.

Further, approximately 1700 projects received investment licenses with a total registered capital of over US$ 15.2 billion, a volume decrease of 31.1 percent YoY, however up 4.1 percent in value YoY.

As with previous years, manufacturing and processing led with total investment capital of US$18.1 billion and accounted for 58.2 percent of total registered investment capital. While electricity production and distribution attracted a small number of new projects, they were large-scale, and thus ranked second with an investment capital of US$5.7 billion and accounting for 18.3 percent of total registered investment capital. This was followed by real estate and wholesale and retail at US$2.6 billion and US$1.4 billion respectively.

FDI disbursement in Q1 2022 stood at US$4.42 billion, an increase of 7.8 percent compared with the same period last year. As with previous trends, Singapore led the list followed by South Korea, Denmark, and China. In addition, Binh Duong province led the list with total registered investment capital. This is due to the Lego Group project by Danish investors in Binh Duong estimated at US$1.3 billion.

Did You Know
While the country has been attracting FDI in virtually all sectors the government is pushing for investment in high-tech and digital economy sectors. In addition, the government has also launched incentives to help businesses affected by the pandemic. These include tax breaks, delayed tax payments, land fee rentals, and support policies for employers and employees.

Trade trends

Exports in 2021 increased in the first 11 months of the year. Exports reached around US$246.7 billion, up 20.7 percent compared to the same period last year and accounting for 73.6 percent of export turnover. The US remained Vietnam’s largest importer in 2021 with an import value of over US$96.2 billion up 24.9 percent year on year.

Demand for electronics such as computers and mobile phones skyrocketed during the pandemic helping Vietnam’s exports. The US imported smartphones and accessories from Vietnam worth around US$ 96.2 billion rising by 10 percent year on year. The US was also Vietnam’s largest importer of computers and electronic products with a value of US$ 12.7 billion. Apart from this, the US imported machinery and equipment and took the lead in apparel imports from Vietnam at US$16.1 billion contributing to Vietnam’s GDP.

In line with Vietnam’s vision to move from a low-cost manufacturing destination to a high-value manufacturer - shipments of raw materials decreased, while the exports of processed and industrial products increased.

Vietnam’s active engagement in FTAs with China, US, EU, ASEAN, South Korea, India, New Zealand, and Australia as well as trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Vietnam-EU Free Trade Agreement (EVFTA), propelled the country’s exports to new levels.

The country’s total imports were valued at VND 7679531.00 billion (US $331 billion) in 2021 with the main categories of import being - computers, electrical products, and parts, as well as machine, instruments, and accessories. Other imports include telephones, mobile phones and parts, textile fabrics, as well as iron and steel.

The total import and export turnover reached a record of US$668.5 billion. In addition, the credit market and exchange rates were stable.


Vietnam Economic Profile  (1990-2020)
  1990 2000 2010 2020
World view
Population, total (millions) 67.99 79.91 87.97 97.34
Population growth (annual %) 2.1 1.1 1 0.9
Surface area (sq. km) (thousands) 331 329.2 331 331.2
Population density (people per sq. km of land area) 208.9 256.9 283.7 313.9
Poverty headcount ratio at national poverty lines (% of population) .. .. 20.7 6.7
Poverty headcount ratio at $1.90 a day (2011 PPP) (% of population) 52.3 37 4 1.8
GNI, Atlas method (current US$) (billions) 8.53 32.63 110.3 259.32
GNI per capita, Atlas method (current US$) 130 410 1,250 2,660
GNI, PPP (current international $) (billions) 58.42 169.1 356.51 761.55
GNI per capita, PPP (current international $) 860 2,120 4,050 7,890
People
Income share held by lowest 20% 7.8 7.5 6.5 6.7
Life expectancy at birth, total (years) 71 73 75 75
Fertility rate, total (births per woman) 3.6 2 1.9 2.1
Adolescent fertility rate (births per 1,000 women ages 15-19) 31 29 34 27
Contraceptive prevalence, any methods (% of women ages 15-49) 53 74 78 77
Births attended by skilled health staff (% of total) .. 59 92 ..
Mortality rate, under-5 (per 1,000 live births) 51 30 23 20
Prevalence of underweight, weight for age (% of children under 5) 40.7 26.7 11.7 13.4
Immunization, measles (% of children ages 12-23 months) 88 97 98 95
Primary completion rate, total (% of relevant age group) .. 100 103 110
School enrollment, primary (% gross) 105.2 109.5 105.7 117.2
School enrollment, secondary (% gross) 35 58 .. ..
School enrollment, primary and secondary (gross), gender parity index (GPI) .. 1 .. ..
Prevalence of HIV, total (% of population ages 15-49) 0.1 0.3 0.4 0.3
Environment
Forest area (sq. km) (thousands) 93.8 117.8 133.9 146.4
Terrestrial and marine protected areas (% of total territorial area) .. .. .. 2.9
Annual freshwater withdrawals, total (% of internal resources) 15.5 21.1 22.8 22.8
Urban population growth (annual %) 4 3.4 3.2 2.8
Energy use (kg of oil equivalent per capita) 263 360 670 ..
CO2 emissions (metric tons per capita) 0.27 0.63 1.7 2.7
Electric power consumption (kWh per capita) 95 287 1,022 ..
Economy
GDP (current US$) (billions) 6.47 31.17 115.93 271.16
GDP growth (annual %) 5.1 6.8 6.4 2.9
Inflation, GDP deflator (annual %) 42.1 3.4 12.1 1.3
Agriculture, forestry, and fishing, value added (% of GDP) 39 25 18 15
Industry (including construction), value added (% of GDP) 23 37 32 34
Exports of goods and services (% of GDP) 36 54 72 106
Imports of goods and services (% of GDP) 45 57 80 103
Gross capital formation (% of GDP) 13 30 36 27
Revenue, excluding grants (% of GDP) .. .. .. ..
Net lending (+) / net borrowing (-) (% of GDP) .. .. .. ..
States and markets
Time required to start a business (days) .. 61 36 16
Domestic credit provided by financial sector (% of GDP) .. .. .. ..
Tax revenue (% of GDP) .. .. .. ..
Military expenditure (% of GDP) 7.9 2.1 2.3 2.3
Mobile cellular subscriptions (per 100 people) 0 1 126.8 142.7
Individuals using the Internet (% of population) 0 0.3 30.7 70.3
High-technology exports (% of manufactured exports) .. .. 13 40
Statistical Capacity Score (Overall Average) (scale 0 - 100) .. .. 64 74
Global links
Merchandise trade (% of GDP) 80 97 135 201
Net barter terms of trade index (2000 = 100) .. 100 127 136
External debt stocks, total (DOD, current US$) (millions) 23,270 12,841 44,940 125,045
Total debt service (% of exports of goods, services and primary income) .. 7.5 2.3 5.6
Net migration (thousands) -394 -651 -400 -400
Personal remittances, received (current US$) (millions) .. 1,340 8,260 17,200
Foreign direct investment, net inflows (BoP, current US$) (millions) 180 1,298 8,000 16,120
Net official development assistance received (current US$) (millions) 180.6 1,485.30 2,769.90 1,094.60
Figures in italics refer to periods other than those specified.

Events in Vietnam

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