In 2022, Vietnam enjoyed a remarkable resurgence in its economy following the challenging times brought on by the pandemic. This recovery was a testament to the nation’s solid economic underpinnings and the careful management of public health during the health crisis. Impressively, Vietnam’s GDP saw an extraordinary growth rate of 8 percent, marking the highest it has been since the 1990s. This surge was primarily fueled by robust domestic and international demand. Furthermore, the nation maintained average inflation at a commendably low 3.2 percent, comfortably below the targeted inflation rate of 4 percent, despite some inflationary pressures surfacing throughout the year.
Regrettably, this economic renaissance faced unexpected setbacks towards the end of 2022 and into the first half of 2023. The real estate sector encountered financial turmoil, grappling with more stringent funding conditions, a dip in property sales, and legal impediments. Concurrently, the corporate bond market froze as investor confidence dwindled. Exchange rate volatility increased steadily throughout 2022, triggered by a global surge in interest rates. In October 2022, a major domestic bank experienced a significant deposit run, necessitating intervention by the State Bank of Vietnam. Compounding these issues, external demand took a sharp nosedive in late 2022, with exports plummeting by a daunting 12 percent in the initial half of 2023. Although liquidity, foreign exchange stability, and inflationary concerns have eased somewhat, the growth rate has decelerated significantly. Projections indicate that growth will taper to 4.7 percent in 2023, underpinned by a resurgence in exports and expansive fiscal policies. Nevertheless, it’s important to note that inflation is anticipated to remain well below the 4.5 percent threshold. While the road to recovery may have encountered obstacles, Vietnam’s long-term prospects for high growth rates remain promising, driven by ongoing structural reforms.
Here is the relevant data according to the IMF: