1. Party General Secretary Nguyen Phu Trong’s official visit to China

Party General Secretary Nguyen Phu Trong paid an official visit to China from October 30 to November 1, his first overseas trip since the 13th National Party Congress in early 2021. He was also Xi Jinping’s first foreign State guest since the latter was reelected as the Communist Party of China Central Committee’s General Secretary for a 3rd term at the 20th National Party Congress in October 2020. During their talks and in the Vietnam - China joint statement, the two leaders reiterated the determination of both sides to further promote and deepen their comprehensive strategic cooperative partnership. Party Chief Trong was also presented a Friendship Order. Thirteen cooperative documents in various spheres, mainly the economy, were signed during the visit. State President Nguyen Xuan Phuc, Prime Minister Pham Minh Chinh, and National Assembly Chairman Vuong Dinh Hue also took part in international events overseas and visited many countries. Such efforts by senior leaders made important contributions to further improving Vietnam’s international prestige and role and promoting its bilateral and multilateral cooperation, especially in trade and investment. The relationship between Vietnam and Thailand and Vietnam and the Republic of Korea was upgraded from strategic partnership to an enhanced strategic partnership and from a strategic partnership to comprehensive strategic partnership, respectively, from such efforts.

2. Economy recovers strongly, GDP growth exceeds target

Vietnam’s economy made a strong post-pandemic recovery in 2022, with GDP growth estimated at 8.02 per cent. The country was therefore seen by international institutions as a highlight regionally and globally in terms of economic growth. It was also one of just a few countries where growth forecasts were adjusted upwards. It posted GDP growth of 8.83 per cent in the first nine months of 2022; much higher than in the same period of 2021. GDP growth in 2022 as a whole is estimated at 8.02  per cent, the highest in the 2011-2022 period. Economic forecasts for 2023 are not overly positive due to inflationary pressure, capital shortages at businesses, falling export orders, the slow disbursement of public investment capital, and low FDI capital flows, among other factors. The government has therefore set a GDP growth target for 2023 of just 6.5 per cent.

3. Trade revenue hits a record $732 billion

Vietnam posted a new record in trade turnover in 2022 of $732.5 billion, an increase of 9.5 per cent against the 2021 figure. Export turnover was estimated at $371.85 billion, up 10.6 per cent year-on-year and exceeding the 8 per cent target set by the National Assembly and the government. The country posted a trade surplus in 2022 for the seventh consecutive year, of $11.2 billion. Vietnam was among the leading countries and territories worldwide in terms of international trade. In the context of geo-political and economic uncertainties worldwide, such impressive trade growth demonstrates the fact that Vietnam is on track for sustainable trade based on balance and harmony, thanks to the country’s competitive and comparative advantages as well as its position in global supply chains.

4. Inflation under control

The CPI in 2022 increased some 3.15 per cent against 2021, which was lower than the 4 per cent targeted by the National Assembly, while inflation was kept at under 4 per cent. This success demonstrates the major efforts of the government, ministries, branches, localities, and businesses in coping with rising prices and inflation both globally and domestically, contributing to stabilizing the macroeconomic environment. The achievement illustrates the success of the government’s monetary and fiscal policies and is even more significant given it was recorded as Vietnam overcame the difficulties and challenges from increasingly complex global circumstances, including the Russia - Ukraine conflict, China’s Zero-Covid policy, fuel and foodstuff crises, and high inflation, among others.

5. Property market struggling due to legal “barriers” and “stagnant” capital resources

2022 was a turbulent year for Vietnam’s property market as most projects came to a standstill due to legal “barriers”. The supervision of the bond and stock markets, credit tightening, and stagnating transactions also made the mobilization of public capital impossible. Additionally, rising loan interest rates, exchange rates, oil and gas prices, and construction material prices seriously ate into the revenues and cash flow of investors. Under such circumstances, the government introduced numerous documents calling for all-out efforts to promote the stable and sustainable development of the real estate market, including Decision No. 1435/QD-TTg establishing a taskforce to review and propose solutions to deal with problems during the development of property projects, and Official Dispatch No. 1164/CD-TTg on removing difficulties facing the real estate market and housing development. Many expect that the widespread involvement of the government, ministries, sectors, and localities will see the real estate market recover next year.

6. Resolution No. 18 initiates a breakthrough in land management and use

On June 16, Party General Secretary Nguyen Phu Trong signed Resolution No.18-NQ/TW on “Renovating and perfecting institutional mechanisms and policies, improving the effectiveness and efficiency of land management and use, and creating a driving force for Vietnam to become a high-income developed country”. With many new directives, the Resolution is expected to create breakthroughs and drive national development and set foundations for the revision of the 2013 Land Law. The Party Central Committee has required that amendments to the 2013 Land Law and other related laws be completed by 2023. The Resolution removes the land price bracket and the formulation of mechanisms and methods to determine land prices under market rules. Under the Resolution, land can only be redeemed after schemes for compensation, support, and settlement are approved. When resettlement is needed for land reclamation, resettlement must be completed before the land is retrieved. The Resolution calls for higher taxes to be imposed on those using large areas of land, owning multiple properties, speculating on land, failing to put land into use as scheduled, or leaving land idle.

7. VN-Index falls below 1,000-point benchmark

After the stock market posted breakthrough growth in 2021 and hit a new record, it began a remarkable decline in 2022 due to a host of different factors. Firstly, increases to interest rates across the globe to curb inflation put pressure on domestic interest rates even though the inflationary pressure was low in Vietnam. Major criminal cases relating to the stock market and the corporate bond market also caused concern about the failure of businesses to repay debts. In addition, as stock prices kept falling, collateral was declining in value, creating pressure to sell collateral and shaking up the market. The VN-Index fell below the 1,000-point benchmark on November 4 and plunged to its lowest level on November 16, of 873.78 points. However, foreign investment inflows were a bright spot, particularly FDI from exchanged-traded funds (ETFs), which continued to flow into the market despite technical factors pushing stock prices downwards.

8. Corruption amid Covid-19

Nearly a year since the investigation agency at the Ministry of Public Security prosecuted a bribery case relating to repatriation flights, the agency arrested and detained 37 other people for their involvement in the case, including many leaders related to the Ministries of Foreign Affairs, Public Security, Health, and Transport, and certain localities. According to the investigation results, the amount of bribes paid was initially determined to be in the “tens of billions of VND and hundreds of thousands of US dollars”, offered by companies for licenses to organize flights to repatriate Vietnamese nationals during the Covid-19 pandemic. Another case that related to the Viet A Company’s Covid-19 test kits was seen as especially serious. The Ministry of Public Security and police in localities have so far prosecuted and detained nearly 100 defendants pending further investigation, including eight former leaders and senior officials from the Ministry of Health and the Ministry of Science and Technology. The remaining defendants are chiefly leaders and senior officials of People’s Committees, centers for disease control, and health departments in many localities around the country. Initial investigative results found that former Chairman and General Director of the Viet A Technologies Joint Stock Company Phan Quoc Viet made a profit of VND4 trillion ($168 million) after offering bribes of around VND800 billion ($33.7 million) to be allowed to supply poor-quality test kits.

9. Corporate bond market tumbles

The corporate bond market has been significantly affected in recent times after a long period of “heated” development and investigations launched into cases involving wrongdoings in issuances. Individual investors have sold bonds before their maturity due to concerns over the failure of businesses to repay debts. At the same time, the market needs time to adapt to new and stricter rules under Government Decree No. 65/2022/ND-CP issued on September 16 to amend Decree No. 153/2020/ND-CP that stipulates rules on corporate bond offerings. The government also requested that the Ministry of Finance continue overhauling Decree No. 65 in order to guarantee publicity, transparency, and the legitimate rights and interests of investors, along with safety and security in financial and monetary markets. The total value of public offerings of corporate bonds fell 60 per cent year-on-year.

10. Full reopening and SEA Games 31 help tourism recover

Vietnam was the first country in Southeast Asia to fully reopen its borders to tourism post-pandemic, from March 15, 2022, and was one of the first 62 countries in the world to remove all travel restrictions. Vietnam then successfully held the Southeast Asian Games (SEA Games 31), welcoming large numbers of international tourists for the first time since the outbreak of Covid-19. Domestic tourism also recovered strongly throughout the year, catering to 101.3 million travelers, a 1.5-fold rise compared to the target and higher than before the pandemic.

Source: VnEconomy

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