Vietnamese Authorities Signal Further Support to the Local Economy

At the conference on maintaining macroeconomic stability, managing inflation, stimulating growth and ensuring a balanced economy, which took place on September 12th, 2022, the Vietnamese Prime Minister Pham Minh Chinh indicated that despite the current global economic downturn, Vietnam will act in an attempt to come up with ways to stabilize and improve the domestic economy.

It was noted that the global geopolitical environment has changed drastically in the last few months, and all the corresponding factors would have both short and long-term implications on the Vietnamese economy. Despite this, it was highlighted during the conference that Vietnam will not wait but actively seek paths of meeting its macroeconomic and development goals.

Importantly, Vietnam has managed to ensure its macroeconomic stability in 2022, particularly in light of instabilities in major global economies, risks and inflation levels. According to the Ministry of Planning and Investment, Vietnam was able to maintain market stability in the first eight months with budget revenues increasing by more than 19% YoY. Furthermore, Vietnam's trade surplus increased 15.5% YoY to approximately USD 500 billion. On the other hand, its labor market rebounded following the ease of the outbreak of the pandemic and Vietnamese GDP growth is likely to exceed 7% in the third quarter.

"Full-year growth is predicted to exceed the target of 6-6.5% and if additional efforts are made, it is likely to be even higher," Nguyen Chi Dung, Minister of Planning and Investment, said at the conference.

Most recently, credit rating agency Moody's has upgraded Vietnam's rating from Ba3 to Ba2, citing its strong manufacturing sector and export growth. Its outlook for Vietnam was changed from positive to stable. Moreover, international organizations, including the World Bank and the International Monetary Fund, have upgraded their own projections and valuation of Vietnam's economic growth, with the IMF raising its growth forecast for Vietnam from 6% to 7%.

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