By World Bank
WASHINGTON, U.S.--Vietnam’s economic recovery is likely to accelerate in 2022 as GDP growth is expected to rise to 5.5 percent from 2.6 percent in the year just ended, the World Bank’s economic update for Vietnam Taking Stock says.
Assuming the COVID-19 pandemic will be brought under control at home and abroad, the forecast envisions that Vietnam’s services sector will gradually recover as consumer and investor confidence firms, while the manufacturing sector benefits from steady demand from the United States, the European Union, and China.
The outlook, however, is subject to serious downside risks, particularly the unknown course of the pandemic. Outbreaks of new variants may prompt renewed social distancing measures, dampening economic activity. Weaker-than-expected domestic demand in Vietnam could weigh on the recovery.
Careful policy responses could mitigate these risks. Fiscal policy measures, including temporary reduction of VAT rates and more spending on health and education, could support aggregate domestic demand.
Entitled “NO TIME TO WASTE: The Challenges and Opportunities of Cleaner Trade for Vietnam,” this edition of Taking Stock argues that greening the trade sector should be a priority.
While Vietnam has started to decarbonize activity associated with trade, more needs to be done to respond to mounting pressures from main destination markets, customers, and multinational companies for greener products and services.
“Trade will be a key component of Vietnam’s climate actions in the years to come,” said Carolyn Turk, World Bank Country Director for Vietnam.
The report recommends the Government act on three fronts: facilitate the trade of green goods and services, incentivize green foreign direct investment, and develop more resilient and carbon-free industrial zones.