What business executives think about economic prospects for 2022

February 01, 2022 - 06:58

In a resolution on the socio-economic tasks to be accomplished in 2022 and financial outlays, the Government has designated it as a year of economic recovery. Efforts made by both foreign and domestic enterprises will play a key role in achieving the goals.

In a resolution on the socio-economic tasks to be accomplished in 2022 and financial outlays, the Government has designated it as a year of economic recovery. Efforts made by both foreign and domestic enterprises will play a key role in achieving the goals. Việt Nam News correspondent Thu Ngân asks a number of business executives what they think about the economic prospects for this year and their own plans.

Đặng Thanh Hùng, vice president of NS BlueScope Vietnam:

Đặng Thanh Hùng, vice president of NS BlueScope Vietnam

Being among the countries with the ​​highest COVID-19 vaccination rates in the world and showing strong signs of recovery at the end of last year, we are confident that the economy will flourish in 2022, and the growth rate will hit the Government’s target of 6.5 per cent. 

This means the Government will need to keep controlling outbreaks of the pandemic and improving the supply-demand balance with stimulus measures.

Foreign investment in Việt Nam was a highlight in 2021. Despite the pandemic, Việt Nam attracted more than US$31 billion worth of foreign direct investment, and, in my opinion, there will be further growth in 2022.

It has been forecast that export-oriented segments in processing and manufacturing will develop even more strongly in key sectors such as seafood processing, electrical and electronic engineering, and textile and garment.

These promising industries will help attract foreign investment and be the main driving force for the economy in 2022. 

We will need to take full advantage of the 15 free trade agreement we have signed such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and EU-Việt Nam Free Trade Agreement.

In order to adapt to the situation and maintain the growth rate, NS BlueScope Vietnam has applied digitisation to production and management with an ERP system establishing connections with all operations. 

We continue to maintain operations even as most employees work from home. In our business activities, we keep a balance between domestic and export markets, focusing on the high-end segment, thereby maintaining growth and market share. It is expected that in 2022, the construction industry will make a strong comeback since demand for building houses, warehouses and factories will increase post-pandemic. We believe 2022 will be the year that NS BlueScope Vietnam lives up to its potential and achieves significant growth.

Đoàn Hồng Việt, general director of DigiWorld:

Đoàn Hồng Việt, general director of DigiWorld

I believe we will exceed the Government’s targets and complete vaccination of more than 70 per cent of the population by the first quarter of 2022.

In addition, I believe the national economy will return to the ‘new normal’ in 2022 and have brighter and more sustainable growth prospects thanks to high vaccination rates. Việt Nam’s GDP is expected to grow at 7.5 per cent in 2022, with resilient growth in all areas.

Its macroeconomic fundamentals could be strengthened with higher trade and current account surpluses and foreign reserves. These buffers could help Việt Nam cope with internal and external risks, including higher inflationary pressure, stronger dollar index and less favourable global financial market conditions.

Foreign direct investment (FDI) inflows will recover strongly in 2022 thanks to the plans to resume regular international commercial flights at the beginning of 2022, which will create favourable conditions for investors and professionals to return to Việt Nam and promote investment in 2022.

Việt Nam remains an attractive location for companies’ ‘China+1’ diversification strategy thanks to advantages such as competitive labour costs and large demography.

Last but not least, Việt Nam has signed very progressive free trade agreements with major partners and regions such as the CPTPP, EVFTA, RCEP... Therefore, investors in Việt Nam will enjoy huge tax incentives when exporting products to countries that have FTAs with Việt Nam.

This year DGW’s key driver will still be ICT products such as Xiaomi - Smartphone, home appliance, iPhone product line and laptop. Xiaomi's market share in the smartphone segment is increasing steadily, reaching 17 per cent in October 2021 as against just 12-13 per cent expected at the beginning of this year.

The demand for high-end products will help iPhone products continue to grow strongly, while the laptop market will maintain a steady double-digit growth rate as the penetration rate continues to increase.

DGW will also look for new growth drivers such as deeper penetration into the home appliance industry (two new exclusive contracts with a brand each from the US and China) and industrial products, FMCGs through mergers and acquisitions (currently unable to disclose more information).

DGW has set a target of at least 25 per cent annual growth in both top line and bottom line for the next 10 years.

Patricia Marques, general manager of Starbucks Vietnam:

 Patricia Marques, general manager of Starbucks Vietnam

I will try to be realistic. I can say Việt Nam remains in a great position to attract foreign investments in many, many industries.

I think Việt Nam will probably see an increase in foreign investments in 2022.

As in past years international investors all want simplicity and transparency. With these two elements promoted by the Government we will no doubt see more investors coming into the country. The legal system probably can modernise and support this movement. I believe then foreign investors will feel confident and look at Việt Nam as the preferred place for investment.

Coming out of a very difficult and long pandemic has changed our mindset. We are all prepared, we know now nothing is ‘as it was before’.  We don’t know when but we know this might happen again, and so we have trained ourselves to be nimble and agile. Going from welcoming our customers to delivering to their offices or homes, taking their orders on our app and preparing those so they can pick them up are now part of our business strategy. 

COVID-19 has accelerated e-commerce, APPs, cashless, etc. in a phenomenal way. 

I am sure the Vietnamese Government is driven by the same interests: having a healthy country where 100 per cent of citizens are vaccinated, preparing the health system to respond to another wave (if any) and supporting industries and businesses that are the soul of Việt Nam. 

We all want the same: a beautiful Việt Nam more sustainable and more ecologically friendly where tourists and locals can enjoy the wonderful geography nature gave it.

Our plan for this year is to continue our business expansion, continue to serve our customers every day and keep our stores safe for our customers and employees.

Bùi Hải An, CPO & CCO of Timo Digital Bank:

Bùi Hải An, CPO & CCO of Timo Digital Bank

After dipping to a record low in the third quarter of 2021 Việt Nam’s GDP growth rebounded impressively in the fourth quarter to 5.22 per cent, higher than in the same period in 2020. 

United Overseas Bank forecasts 7.4 per cent growth in 2022, but with the appearance of the Omicron variant, many global experts think 6.3-6.8 per cent growth is more likely. 

Following the success of six Vietnamese start-ups that received fresh capital amidst the pandemic, foreign investors seem to have not lost their trust and confidence in Việt Nam as evidenced by the steady FDI inflows in 2021. There was a 9.2 per cent rise, demonstrating foreign investors' confidence in Việt Nam's investment and business environment. 

Việt Nam is an emerging market in the APAC region and attracting a lot of attention from foreign investors, [especiallly] those who seek sustainable and long-term development. The country has a lot of potential due to its young population. During the past five years Việt Nam also witnessed considerable growth in digital payments, e-commerce, delivery, e-wallets, and digital banks. Although the pandemic is not entirely over, investors are gaining more confidence in Việt Nam’s recovery signalling a positive year for FDI, especially in the fintech start-up segment. 

Interruptions to daily activities were minimised during the COVID-19 pandemic thanks to companies’ quick digitisation. The impact of COVID was then minimised and the trend has been continuing post-pandemic time. To continue supporting this, the Government will need to design a well-balanced regulatory framework supporting innovation while ensuring consumer protection and financial stability. Once a comprehensive legal framework is established, Việt Nam is more likely to become a leading investment destination in Southeast Asia and the world.

As one of the leading digital banks in Việt Nam, Timo aims to set the benchmark for modern banking in Việt Nam. With our most recent funding from Square Peg and other global investors, Timo will thrive this year. We aim to optimise our mobile app platform for business growth and product innovation focusing on customer experience and workplace improvement. 

There is no doubt that over the last few years Việt Nam has become more open and adapted quickly to new trends. More specifically, the Vietnamese Government has been very supportive of fintech. Many initiatives and sandboxes like eKYC (electronic Know Your Customer), agent banking and P2P lending have been rolled out. 

Timo and other fintech companies understand that regulations take time to be refined as it needs to put customers’ protection first. To create more room for fintech development, the Government can work hand in hand with fintech companies like Timo to best find the sweet spot between customer safety and making sure Việt Nam stays on top of global fintech trends.

Hồ Mai Ngọc, country manager of Wacom Việt Nam:

Hồ Mai Ngọc, country manager of Wacom Việt Nam

We feel that Việt Nam has a huge opportunity for growth in various creative segments such as animation, gaming, graphic design, industrial design, etc. Việt Nam has been identified by us as one of the fastest growing countries in SE Asia and we will be investing a high proportion of our funds into that growth target. 

Local skills and contents are very important to attract investors. If the Vietnamese Government is able to train and promote local talent, Việt Nam will definitely be able to offer a better value proposition than other countries.    

Wacom will definitely be treating Việt Nam as the top priority in SE Asia in terms of growth and expansion. We hope the Vietnamese Government plays a more active role in identifying changing business trends as we move into the new normal and pave the way for more companies to execute their growth plans.  VNS