The hard times are not over yet, warned Le Anh Tuan, Deputy Director of Investment of Dragon Capital, even though the economy is forecast to rebound in 2022.

He made the comments at the “New opportunities – New actions” seminar held by the Ha Noi Young Entrepreneurs Association last week.

Tuan said the worst was over and the economy would soon recover thanks to two driving forces, namely public investment and low-interest rates. However, some hardships will persist.

According to Tuan, the economic recovery will likely be uneven across industries. Those less affected by COVID-19 and more capital-intensive will be back on track sooner than those hard-hit by the pandemic, like the more labour-intensive textile or footwear industries.

Vaccination rates are high in pandemic hotspots and are expected to be on par with developed countries like Japan or the US by March 2022. This means that Viet Nam can fully reopen the economy soon. However, it will take time for the service industry to recover as connections between provinces still remain tenuous.

The Deputy Director of Dragon Capital also said that the economic recovery would come with a drastic structural change in the economy. Big companies might continue to expand whereas small ones might weaken and wither away after the pandemic. This could already be seen in the stock market where the earnings of public companies were expected to rise by 38 per cent in 2021 and 28-30 per cent in 2022. On the other hand, dark clouds were on the horizon for small and medium ones as many of them ceased operation and awaited dissolution.

Tuan warned that it would take up to 4-6 months for the south to return to normality, and labour shortages may persist due to uneven vaccination rates between localities.

He expects the government and the National Assembly to pass large-scale aid packages to lift the economy out of hardship and kick-start recovery.

“Oil price went up from US$30 per barrel last year to US$80 this year, yet inflation still stays under control. Eight-month core inflation rose just 0.9 per cent. This means that inflation is quite favourable for big plans to be implemented”, Tuan said.

Additionally, a well-managed national debt had allowed Viet Nam to keep interest rates low. Thanks to these favourable conditions, the country could also introduce large-scale loans, with preferential interest rates, to help businesses in need of liquidity, Tuan said. — VNS