Vietnam Market Outlook | March 2022

Macro Outlook

Capable of rising above global issues by distinct characteristics

We maintain our GDP growth projection for 2022 to range between 5.9 – 6.8%. Positive economic signs, a recently passed stimulus package, high vaccination rates, the living-with-COVID strategy and the reopening of the international tourism sector all point towards a strong recovery in 2022. 

Over the past month, there were two events which could affect Vietnam’s economy in term of growth prospect which were FED rate hike and the outbreak of the war in Ukraine. These events could affect Vietnam’s monetary policy and contrinute to inflation. However, our monetary policy management of the State Bank of Vietnam will have no major impact over FED rate hikes if :

• Vietnam could continue to maintain inflation below 4%, 
• FDI inflows continued to be strong and 
• trading activities especially export continued to remain solid.

In addition, we also expected that Vietnam’s inflation to remain below the government’s 4% target in 2022 thanks to 

• Grain food and foodstuff prices will stabilize when transportation and supply chains of goods are normalized in 2022, 
• Food & foodstuffs will not in supply shortage due to surging demand or supply chain disruptions or low production in 2022, and 
• Size of stimulus package is relatively small (+~3% of the total money supply, and ~4% GDP of 2021) and will not cause major inflation pressure.

See details in the attachment below.