Vietnam's GDP is expected to reach 7.2% in 2022, according to the World Bank

DNHN - The World Bank (WB) recently held a conference to release the East Asia and Pacific Economic Update Report for the October 2022 timeframe, which predicts that Vietnam's economy would rebound rapidly and GDP will expand by 7.2% in 2022.

According to the World Bank, Vietnam's economy would grow by 7.2% this year due to robust domestic demand and good export-oriented processing and manufacturing.

Earlier in August, the World Bank predicted that Vietnam's economic growth would accelerate from 2.6% in 2021 to 7.5% in 2022, with inflation rising by an average of 3.8%.

According to a World Bank report issued today, development in most developing nations in East Asia and the Pacific has rebounded in 2022 after being impacted by Covid-19, but China has lost its growth momentum owing to prolonged virus containment efforts.

Slowing global demand, growing debt, and increased reliance on short-term economic policies to prop up food and fuel prices might all have an immediate impact on regional economic results.

According to the Update Report, the growth rate of emerging nations in East Asia and the Pacific area outside of China is expected to rise to 5.3% in 2022 from 2.6% in 2021. East Asia and the Pacific Economic Situation, October 2022, World Bank. China, which had previously led the region's recovery, is now expected to expand at 2.8 per cent in 2022, down from 8.1 per cent in 2021.

Growth in the area as a whole is expected to dip to 3.2% this year, down from 7.2% in 2021, before picking up to 4.6% the following year.

Vice President of the World Bank for East Asia and the Pacific "The economic recovery is taking place in most nations in East Asia and the Pacific," stated Manuela V. Ferro. Countries must address local policy imbalances that are impeding long-term development while planning for a downturn in global growth."

Domestic demand, the relaxation of Covid-related limitations, and export expansion drove growth in the majority of East Asian and Pacific countries. China, which accounts for around 86% of the region's production, is presently implementing focused public health measures to combat the virus's spread, which has impeded economic activity.

Slowing global economic development is steadily diminishing demand for export and manufacturing goods in the region. In certain East Asian and Pacific nations, the simultaneous rise in inflation prompted interest rates to rise, resulting in capital outflows and currency depreciation. Such changes increase debt repayment obligations and reduce budgetary headroom, harming pandemic-affected nations with large debt loads.

According to the World Bank analysis, while nations in the area seek methods to safeguard consumers and businesses from rising food and fuel costs, current policy solutions merely add to existing policy distortions by providing demand-supportive features.

Food price limits and energy subsidies benefit the wealthy and have an impact on government expenditure on infrastructure, education, and health. Current initiatives to postpone payments to relieve financing circumstances during the epidemic might imprison resources in bankrupt enterprises, preventing money from accessing the most active professions and industries.

According to Aaditya Mattoo, the World Bank's head economist for East Asia and the Pacific, "Policymakers must choose between dealing with inflation and promoting economic recovery. Price controls and subsidies distort price signals and reduce productivity. Better food, fuel, and finance policies would both encourage growth and protect against inflation."

TH