Vietnam – Foreign Investment Outlook for 2022 and Beyond

February 22 2022

Mr Dong Le, Head of Market Research and Consulting Services of FiinGroup, spoke at the Webinar

On February 16th, 2022, FiinGroup and scoutAsia have successfully organized the Webinar "Vietnam - Foreign Investment Outlook for 2022 and beyond" with the participation of over 350 attendees from corporates, financial institutions, consulting firms, investment funds, trade, and investment promotion agencies in Japan, Korea, Singapore, EU, and the US.

Mr. Dong Le, Managing Director, Head of Market Research and Consulting Services of FiinGroup, joined the Webinar as a speaker together with Ms. Hieu Vuong, Deputy Director General, Department of Management of Economic Zones, Ministry of Planning and Investment, and Mr. Daryl Neo, Chief Commercial Officer, scoutAsia, Founding Director and CEO, Handshakes

This event provided audiences with the most updated information and in-depth insights on the current situation and outlook of Vietnam’s macroeconomics, highlights on some promising sectors for foreign investors, and the Government’s policies to support business recovery and to attract more foreign investment in the years to come.

The speakers also discussed some challenges faced by foreign investors in sourcing reliable business information and market insights, how FiinGroup and scoutAsia support the clients to overcome the obstacles as well as our track records to handle the assignments.

Please kindly have a look at the highlights of the webinar:

  • Vietnam economic growth is estimated to rebound in 2022 when the Government has steadily reopened the economy from early Oct 2021, switching from a “Zero-Covid” policy to “Living with Covid” policy together with the implementation of an efficient vaccination program. The manufacturing, trade flows, and domestics mobility has bounced back very quickly and based on these movements, some international donors (like ADB) have estimated that Vietnam may rebound and reach 6.5% growth in 2022.

  • Regarding to foreign trade activities, in recent year, Vietnam has shown its effort to integrate into the global supply chains via myriad FTAs, including some high standard and comprehensive ones such as CPTPP, EVFTA, RCEP. This supports Vietnam import-export turnover to reach a new record of over US$ 668 bn in 2021 despite challenges from the pandemic, enjoying continuous double-digit growth in the last 10 years with the great contributions from large trading partners such as US, China, EU, ASEAN, Korea and Japan. For now, FDI corporates account for roughly 70% - 75% of export revenue and become the key contributors to the high growth of our export in the last 5 years.

  • In 2022, inflation is expected to bounce back to 3.5% from 1.84% in 2021 due to the gradual recovery of domestic consumption and investment demands as well as global commodity price movements. However, it would remain under the Government’s control and below the target of 4% set by the National Assembly.
  • Amidst Covid-19, M&A transaction value in Vietnam hit a new record at US$8.8bn for the first 10 months of 2021 and this figure is estimated to reach over US$9bn for the whole year. Financial services, real estate, and consumer goods are the top 3 attractive sectors for foreign players and M&A has been becoming the optimal market strategy for foreign investors penetrating the market in recent years.
  • Mr. Dong Le, Managing Director, Market Research & Consulting Services, FiinGroup, also gave the highlights on some selected promising sectors for foreign investors:
  1. Energy: In short run, some foreign and local power developers are facing some challenges in terms of new renewable energy price mechanism as well as finalization of Power Development Plan No.8. However, in long term, the clean and renewable energy sectors are forecasted to enjoy positive prospects as electricity demand in Vietnam is expected to continue its high growth rate (around 8 – 9% per year in the next 10 years); and the clean/renewable energy is one of the key development priorities of the Government to diversify power sources and realize its commitments to reduce greenhouse gas emissions.
  2. Water supply: The water supply sector is forecasted to grow up at around 8.8% in the next 10 years and the growth drivers mainly come from the growing household’s water consumption and industrial park segments.
  3. Financial Services: In the last 5 years, credit institutions have enjoyed continuous double-digit growth. The financial sectors have shown its attractiveness thanks to low sector penetration rates in terms of consumer lending to GDP and banked population in comparison to other peers in the region, the young and tech-savvy population, increasing disposable income and consumption, booming online transactions, growing demand for digital banking products.

  • In conclusion, Vietnam remains an attractive destination for foreign investors in time to come. The strong fundamentals of Vietnam economy come from two main factors: compelling domestic demands (thanks to favorable demographic, social and political stability) and strong export-driven economy and committed integration to global value chains via 15 FTAs Vietnam joined in recent years. Mr. Dong Le also emphasized that foreign investments in sustainable and environmentally friendly sectors such as clean energy, electricity vehicles, recycling businesses are strongly encouraged by central and provincial Governments. Besides, some notable opportunities by sector for foreign investments in Vietnam are logistics (i.e warehousing, coldchain etc.,), technology, financial services, utility (i.e clean energy, water supply, waste treatment etc.,), manufacturing (i.e part, packaging, consumer goods etc.,), and industrial real estate.
  • Mr Dong Le also discussed some challenges faced by foreign investors in sourcing reliable business information and market insights, how FiinGroup support the clients to handle their assignments as well as our track records.

Kindly refer to the detailed presentation handout HERE.

Revisit full webinar HERE.

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