FDI INVESTORS MAINTAIN CONFIDENCE IN VIET NAM’S ECONOMIC PROSPECTS, WB SENIOR ECONOMIST SAYS

FDI investors still have confidence in the prospects of the Vietnamese economy for several reasons, Dorsati Madani, Senior Economist at the World Bank Viet Nam told VGP in a recent interview.

She said that this is an economy that actually grew in 2020 by 2.9% when a majority of other countries experienced severe economic contraction. That is a major sign of resilience and economic strength, so the fundamentals of the economy are solid. In the first 6 months this year, the economy posted robust economic growth.

The slowdown in economic activities in Q3 is clearly related to the social distancing policies related to fighting the fourth wave. And of course, that affects economic growth estimates.

In its latest Taking Stock report, the World Bank estimated Viet Nam’s GDP to expand by about 4.8 percent in 2021. This forecast, two percentage points lower than its projection in December 2020, partially accounting for the negative impacts of the ongoing COVID-19 wave on economic activity.

Despite these economic challenges in Q3, there was an increase in FDI commitments in August, which really signals that it is a sign that international investors are still interested in doing business in Viet Nam, said Ms. Madani.

In fact, over the first eight months of 2021, FDI commitment reached a total of US$ 14 billion, only two percent lower than the same period in 2020 while the disbursed investment reached US$11.7 billion, up 2 percent on year, the economist stated.

She went on to say that: “Last week, I participated in a business event, where I met Vietnamese and international companies and investors including FDI investors, and I find it interesting because what I saw are companies, including FDI companies, that are facing challenges and difficult times, but have also shown a lot of resilience, agility and innovation to adjust to the situation.

One global food production corporation showed us how they are facing these challenges, but also announced that they are bringing in another US$180 million of investment into Viet Nam because they believe in the economy. So while it's true that a lot of businesses are facing the same challenges, we also see a faith in an economy that has plenty of room to grow.”

Commenting on the recent efforts by the Government to fight the epidemic and maintain economic development, Ms. Madani said the Government is doing a lot to contain the epidemics while ensuring economic activities, especially an important shift in the strategy to “live with the pandemics” and away from “zero Covid”.

To support the economy, in April, the Government announced a package to delay tax payments until the end of the year. The Government also announced two packages (in April 2020 and again in July 2021) to support affected households and informal workers

As a development partner, the World Bank has helped Viet Nam on getting more vaccines and provided financial support and policy suggestions so that the country can strengthen its heath system, and recover the economy in a resilient and sustainable manner.

Last month, both sides signed an agreement for a US$2.75 million grant provided by the Japan Social Development Fund for the “Strengthening preparedness and response to COVID-19 at the grassroots level in Viet Nam” Project.

The project aims to strengthen preparedness and response capacities for pandemics and other health emergencies at the community level in three proposed provinces: Vinh Phuc, Khanh Hoa, and Long An.

Earlier in June, The Bank’s Board of Directors approved two loans totaling $321.5 million to help Vietnam economic recovery at the central level and Ho Chi Minh City in particular.

These two operations are designed to improve urban management and promote a recovery that is inclusive, digitally transformative, and sustainable.

She promised that the World Bank will do its utmost to help Viet Nam recover from the pandemic.

Source: VGP