The problem of economic opening to keep growth and FDI inflows

The speed of opening will determine Vietnam's economic growth prospects and foreign direct investment (FDI) inflows, but this needs to be calculated carefully.

 Khoon Goh, Head of Asian Studies, ANZ Bank, said that the Vietnamese government is facing a difficult choice between protecting its people and developing the economy. Social distancing orders are effective in containing the pandemic, but have severe economic effects. If the Government does not provide generous support for businesses and workers, the negative impact on economic growth could be too great.

“Opening up the economy also poses the risk of disease outbreaks, overloading the health system and affecting many activities when both businesses and people become cautious. Prolonged lockdowns or opening too soon can both lead to long-term damage to the economy's growth potential," Goh noted.

Even so, Mr. Goh still believes in the prospect of attracting FDI, when Vietnam has signed many free trade agreements (FTAs) and deepened its participation in the world electronics supply chain. The pandemic has disrupted supply chain movement into Vietnam, but the shifting trend will continue as Vietnam has many favorable factors such as greater market access and a high-quality workforce.

Fitch Ratings expert in the Asia-Pacific region shared with the Investment Newspaper reporter that restrictions due to the fourth outbreak of the disease may affect the socio-economic situation in the third quarter of 2021 and may affect the socio-economic situation in the third quarter of 2021. can be prolonged if the epidemic is not controlled. Under this impact, Fitch Ratings' original GDP growth forecast for Vietnam at 6% may no longer be feasible.