HCMC – Inflation in Vietnam is projected to rise sharply to 3.8-4.2% this year and remain at 4% next year, according to a report jointly issued by the Asian Development Bank (ADB) and the Bank for Investment and Development of Vietnam (BIDV).
BIDV and ADB yesterday, May 25, co-organized a conference to announce the report reviewing Vietnam’s financial market in 2021 and its outlook in 2022.
Given the world’s macroeconomy and geopolitics turning more complicated this year, the report said that the global stock market could see strong volatility and return to the downward trend, while global banking and insurance would continue to recover despite slow progress.
As for Vietnam, its economy is making a relatively speedy recovery thanks to the country’s appropriate anti-Covid strategies and the reopening of the local economy in the last quarter of 2021. Accordingly, the country’s growth rate in the fourth quarter of 2021 improved by 5.22% from minus 6.02% in the previous quarter, helping the 2021 growth rate reach 2.58% and inflation remain at a low level of 1.84%.
In 2022, with the reopening of the economy, the determination to safely and flexibly adapt to Covid, a host of measures to cushion the impact of the Russia-Ukraine conflict, efforts to control commodity prices and inflation, and the implementation of the country’s socioeconomic recovery and development program in 2022-2023, Vietnam’s economy is forecast to see better recovery, with a growth rate likely to reach 5.5-6% in 2022 and higher in 2023.
The local banking sector’s profit is projected to grow by 20-25% on average against the 2021 figure and credit growth is expected to stay at 14-15%.
ADB and BIDV said the country could continue to focus on completing a legal framework and policies to tackle bad debts, manage new business models, improve financial system risk control, accelerate digital transformation, and carry out a program to help the banking system recover.
The local stock market would be adjusted to become more stable and healthier, with the benchmark VN-Index likely to improve by 8% to 1,610 points under an optimistic scenario or slightly 4% to 1,440 points under a pessimistic scenario.
The corporate bond market may continue to grow further in a more transparent and healthier manner as more stringent regulations are issued, in addition to measures to tighten market management and supervision to reduce risks for market participants.
Meanwhile, the insurance market is predicted to maintain growth, with premium revenue edging up by 18-20%.