Vietnam expected to be ASEAN’s fastest-growing economy in 2022: ADB

Strengthening the healthcare system and ensuring effective and timely implementation of the Economic Recovery Plan for 2022-2023 is key for Vietnam to boost growth recovery this year.

Vietnam is set to be the fast-growing economy among ASEAN countries in 2022 with estimated GDP growth of 6.5% year-on-year, the Asian Development Bank (ADB) said today [January 20].

Electronics production at Samsung Vietnam’s manufacturing plant. Photo: ADB

Such growth would see a strong rebound from the 2.58% rate recorded in 2021, despite the fact that the pandemic continued to exert its severe impacts on the Vietnamese economy.

The figure, however, remains 0.5 percentage points lower than ADB's forecast from last April, said ADB senior economist James Villafuerte at the launch of the bank's Covid-19 country assessment report.

In addition to Vietnam, the Philippines and Malaysia would make up the top three in Southeast Asia with the best economic prospects in 2022, recording their respective GDP growths of 6 and 5.9%.

According to Villafuerte, over 28 million people in Vietnam have been negatively affected by the pandemic last year, which resulted in losing jobs, working on rotating shifts, or suspending business operations under strict lockdowns.

The pandemic also caused severe labor shortage and subsequent production disruption as around two million laborers returned to their hometowns in the third quarter of 2021.

To ensure a speedy economic recovery this year, Villafuerte called for the Vietnamese Government to further strengthen the healthcare system, including the provision of sufficient support for health workers; maintaining the delivery of essential healthcare services; and allocating extra resources for the healthcare system for the Covid-19 response, and other health shocks in the future.

He also stressed the necessity for Vietnam to timely and effectively implement the Economic Recovery Plan in the 2022-2023 period, which combines fiscal and monetary policies covering key areas such as healthcare services, social security, public investment, and business support.

Another key growth driver for Vietnam in 2022 is set to come from digital transformation, for which the ADB economist suggested Vietnam soon finalize a complete legal framework covering the digital economy.

He called for Vietnam to create a more favorable environment for innovative activities, develop digital infrastructure, and leverage public and private partnerships (PPP) in digital transformation.

"Improving digital skills and highly-qualified labor force should also be at the center of such efforts," Villafuerte said.

Looking across the region, the ADB's report suggested the economic recovery is emerging, but it "remains tentative, uneven, volatile, and varied," and put the regional average GDP growth at 5.1% in 2022.

The spread of the Omicron variant, however, could further reduce growth forecast by 0.8%, ADB said, while investment in healthcare systems in the region could raise output growth by 1.5%.