Standard Chartered predicts strong recovery of Vietnam's economy
Vietnam's economy is said to recover strongly from the end of the first quarter. GDP growth is expected to be 6.7 per cent in the year, and 7 per cent in 2023, according to Standard Chartered Bank.
The Ministry of Foreign Affairs (MoFA) and Standard Chartered Bank Vietnam on February 18 co-hosted the 2022 Economic Outlook and Green Finance Policy forum in Hanoi, which attracted over 120 participants, including representatives from state agencies, embassies, the Asian Development Bank, businesses, and economists.
Deputy Minister of the MoFA To Anh Dung highly appreciated the report of Standard Chartered on the economic outlook of the globe and Vietnam.
In his presentation on the global outlook, Edward Lee, chief economist for ASEAN and South Asia at Standard Chartered Bank, forecasted the global growth will moderate to 4.4 per cent in 2022 from 5.8 per cent in 2021. High base effects, tighter monetary and fiscal policies, global supply-chain disruptions, and elevated inflation are expected to moderate the recovery momentum, following a strong bounce earlier in 2021 driven by initial vaccine rollouts and government stimuli.
Commenting on Vietnam’s outlook, Tim Leelahaphan, economist for Vietnam and Thailand at Standard Chartered Bank, expected the country’s recovery may accelerate markedly in 2022, starting in the late first quarter. The growth forecast is 6.7 per cent for 2022 and 7 per cent for 2023, thus Vietnam’s positive medium-term outlook remains intact.
The economist anticipated that the country will likely remain a key link in the global supply chain. Rising wages in China and the US-China trade tensions have prompted many companies to shift production out of China or opt for a ‘China plus one’ production strategy. As this diversification process continues over the medium term, Vietnam is likely to retain its position as an alternative manufacturing base. Foreign investment activities in Vietnam are also likely to resume this year.
The panel discussion, which followed the economic outlook presentations, was joined by industry thought leaders and experts and moderated by Can Van Luc, member of the National Advisory Council on Financial and Monetary Policy and chief economist of BIDV.
The speakers discussed global and regional trends on green finance, how Vietnam can access and mobilise green finance resources, and solutions and policy recommendations for the country on green financing in achieving sustainable development goals.
"The future of sustainability and our journey towards net zero require joint efforts and collective action. Vietnam is an important market in Standard Chartered’s Asia footprint and we are committed to investing in the country to help finance its sustainable development and secure greater economic prosperity,” said Ben Hung, CEO for Asia at Standard Chartered Bank.
“We will continue to connect Vietnam with the world and provide sustainable finance to areas where it matters most. And we believe that the government’s enhanced focus on greening the economy will offer businesses and investors increased confidence to invest more into Vietnam’s sustainability agenda for the long term,” added the CEO.
Michele Wee, CEO at Standard Chartered Bank Vietnam commented, “The Vietnamese economy is now on a recovery trajectory. In our market research, our clients have told us that Vietnam holds tremendous potential for growth and investment attraction. The country is playing an increasingly important role in international trade and the global supply chain. As a leading international bank in Vietnam, we remain fully committed to supporting the country’s strong, sustainable recovery and growth in 2022 and the years to come.”
The forum is part of Standard Chartered’s ongoing efforts to support Vietnam’s sustainable development process.
In November, the bank joined hands with the Ministry of Planning and Investment and the Embassy of Vietnam in the UK to organise a conference in the UK with the prime minister of Vietnam on securing a prosperous and sustainable future through private investment. As part of this event, the bank exchanged MoU worth $8.5 billion with three Vietnamese businesses on projects to support their sustainability goals.
Aspiring to become the world’s most sustainable bank, Standard Chartered has set out its ambitious new targets to reach net zero carbon emissions from its activities by 2050, including interim 2030 targets for the most carbon-intensive sectors.
The bank also plans to mobilise $300 billion for green and transition finance by 2030.
