Vietnam will likely be among Asia’s fastest growing economies next year, despite a weaker currency and falling foreign reserves, according to a recent article published on the Wall Street Journal (WSJ).
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According to the author, Megha Mandavia, after the tough years of 2020 and 2021, Vietnam spent much of 2022 in the sweet spot - still-low inflation and rapid growth.
Times will get a bit tougher now, but the country is poised for fast growth next year - Natixis is forecasting 6.5%, while Capital Economics expects more than 7% - and the weakening currency may help soften the blow from weaker export demand.
The article assessed that the situation could get even trickier for Vietnam if the world slides into a recession. However, thanks to investments in infrastructure, aggressive trade liberalisation and relatively cheap wages, its manufacturing engine remains intact.
Vietnam also has the advantage of starting from an enviable growth position: roaring at 13.7% year on year in the third quarter of 2022 on the back of strong exports to the US.
The author noted that the country has also been partly insulated from the global surge in food prices - it is among the leading rice producers and exporters globally./.
VNA
