Vietnam’s economic outlook in a post-covid era by Constantin Vietnam
Vietnam’s economic outlook in a post-covid era
Vietnam is slowly reopening its economy after 2 years of restrictions, and a strict lockdown of 4 months in multiple cities last summer. This resulted in a decline of GDP growth from 7.02% (2019) to 2.91% (2020) and 2.58% (2021).
With countless efforts to control the pandemic, Vietnam was one of the most resilient economy in the last 2 years and the country is now experiencing its most positive period since the appearance of Covid-19. Economic recovery is the next step in Vietnam’s resilience strategy, Vietnam is targeting GDP growth of 6.0% to 6.5% for the year 2022.
In order to achieve this goal, Vietnam recently implemented various policies aimed to support the enterprises to recover and attract a new wave of foreign investors in a variety of sectors and industries.
The most notable policies include cutting off the standard Value-Added Tax (VAT) rate from 10% to 8% since February 2022 to December 2022, simplifying the entry processes for foreigners and Vietnamese stranded overseas, reducing the quarantine time on arrival, and at the time of writing this article, the Government is planning to remove most of the restrictions and allow regular cross-border tourism by March 15th, 2022.
Additionally, the Vietnamese Government will inject billions of dollars in strategic parts of its economy (Medical Sector, Labour and Employment, Household Businesses, Tourism, Infrastructures, …).
The accession to the Regional Comprehensive Economic Partnership (RCEP), as well as the entry into force of the EU-Vietnam Free-Trade Agreement (EVFTA) in 2020, will play a major role in the economic stability and growth of the South-East Asian country in future years.
The pandemic has also shown the strong ties between Vietnam and France, which sponsored vaccines and various medical equipment and supplies for Vietnam in the fight against COVID-19.
In November 2021, the official visit to France by Prime Minister Pham Minh Chinh was a milestone in the bilateral relations of the two countries, and demonstrated France’s commitment to enhancing investment, economic and trade cooperation with Vietnam.
As of December 20th, 2021, France ranked 16th out of 140 countries/territories and 3rd among EU investors in Vietnam.
The country currently offers a great alternative for companies to diversify their supply chain outside of China.
Our team at Constantin Vietnam is composed of technical and business acumen experts, and we are ready to assist foreign investors to establish their presence in Vietnam. Our knowledge of the business environment will help you at any stage of your investment process.
Truong Nhat Hoa,
Partner of Constantin Vietnam
