(VOVWORLD) - The World Bank’s update on Vietnam’s macro-economy for June says Vietnam’s economy is on a positive recovery track. Since the beginning of the year, other organizations have made optimistic forecasts for Vietnam's economy, pointing to signs of improvement in a number of industries despite global uncertainty.
 Illustrative photo (photo: baochinhphu.vn) |
Vietnam’s economy recovers after pandemic
The WB’s report lists several positive signs for Vietnam’s economy.
Industrial production continued a robust expansion of 10.4 percent a year similar to the growth rate before the pandemic.
The Purchasing Managers’ Index (PMI) of the processing and manufacturing industry rose to the highest level in the past 12 months. Apparel, footwear, computers, electronics, and optical products also maintained solid growth. The main mobility indicators have fully recovered. The number of visits to restaurants, cafes, shopping malls, and other retail and entertainment places has reached pre-pandemic levels.
Credit growth remained strong at 16.9 percent a year and overnight interbank interest rates dropped sharply from 1.73 percent in April to 0.33 percent as of the end of May.
The Asian Development Bank (ADB) forecast that Vietnam's economic growth rate would recover to 6.5% this year and reach 6.7% next year. The International Monetary Fund released its forecast in May at the forum "Vietnam’s economic prospect 2022-2023: Growth scenarios and prospects for some key economic sectors".
IMF Resident Representative in Vietnam Francois Painchaud said: "Vietnam has managed to achieve remarkable high vaccination rate, which shows its strategy toward living with COVID. Since the easing of restrictions, mobility has improved and economic recovery is underway added by econmic policies." He said that Vienam has successfully maintained external relations, fiscal and financial stability and provided macro economic support and fiscal policies for household firms, and reduce interest rate."
In May, S&P Global Ratings upgraded Vietnam's long-term national credit rating to BB+ with a "stable" outlook. In the context of global complications and severe pandemic impacts, Vietnam was one of just two countries in the Asia-Pacific upgraded since the beginning of the year. The stable outlook reflects S&P expectations that over the next 12-24 months, Vietnam's economy will continue to recover from the past two years.
Creating a driving force for the economy
During the COVID-19 pandemic, Vietnam adopted many macro-economic policies and flexible fiscal policies to support households and businesses, including tax relief and increased investment.
 Deputy Governor of the State Bank of Vietnam Dao Minh Tu (photo: VOV) |
The government’s socio-economic recovery and development program has created opportunities for rapid production recovery. Deputy Governor of the State Bank of Vietnam Dao Minh Tu said the State Bank has maintained liquidity and reduced interest rates, essential moves to help banks weather the crisis.
“Since the beginning of the year the State Bank has pumped capital into the economy and extended credit to key sectors to help businesses rebound as quickly as possible. Total credit has increased 7.75%.”
Credit has increased in agriculture, industry, trade, services, and restaurants, all of which were seriously hurt by the pandemic. The policies have had good results in the first 5 months of this year.