Covid-19 brought out weaknesses and strengths in every economy. Vietnam wasn’t spared. Yet because of the government’s effective containment strategy, the economy bounced back swiftly minimizing the economic and health impact that continues to be a drag elsewhere in the region. Amazingly, Vietnam’s GDP grew 2.91% in 2020 – one of only a handful of countries in the world that did grow – and this year, it is likely to surge to 6.5% to 7% owing to the return of domestic consumption and manufacturing activity.
Foreign direct investment (FDI) topped US$17 billion in 2020 bringing the total accumulated stock value to US$382 billion across 32,915 projects. Investors are mostly from the region targeting manufacturing, processing, real estate, and electricity production and distribution. Multinational companies continue to pour investments into the country given its strong investment climate and as some move to diversify production across the region. In addition, Vietnam’s participation to Free Trade agreements (FTAs) gives it an advantage in attracting FDI.
Vietnam’s successful response to Covid-19, which is widely acknowledged, is also boosting activity among foreign investors in the equity market. The number of newly opened retail trading accounts has more than doubled in 2020. Meanwhile, the country’s industrial real estate market remains the hottest segment and likely to remain the case in 2021 amid strong demand that is driving industrial land rental rates higher.
With a rosy outlook for 2021 comes perils. Tariffs, non-performing loans (NPL), and tourism inactivity (being a major contributor to Vietnam’s economy) are a matter of concern. How will Vietnam overcome the risks? Capturing a rare golden opportunity from the pandemic, how will the country perform in 2021?
Organized in association with Fitch Ratings, The Asset Events+ is pleased to be hosting a two-part webinar series entitled Fitch on Vietnam.