Berlin (VNA) - Credendo Group’s offices in Germany and Austria have published astudy to evaluate the level of risk in Vietnam, which emphasised that theSoutheast Asian country is continuing its successful economic story after itsgood performance in controlling the COVID-19 pandemic.

The article quoted the latest country study ofCredendo, saying that Vietnamhas been one of the few highly resilient countries during the unprecedented COVID-19shock.

The swift, strict andvery effective containment of the virus after the outbreak in neighbouringChina largely explains this, it said, noting that an early travel ban, testingand wide-scale contact tracing on top of the containment measures have helpedkeep the virus under control.

While most countrieswere severely hit and hindered by the economic impact of the virus, Vietnam’seconomy continued to operate at a good albeit slower pace despite an initialhigh level of business disruption, it said.

Credeno's study shows that in 2020,Vietnam had exceptionaleconomic performance while advanced and emerging economies in all the world’sregions have suffered a record recession.

The study said forVietnam, the global demand slump was more than offset by the strong globaldemand for medical products, electronics and computers resulting from theCOVID-19 crisis. Hence, exports of goods grew last year.


Increasedpublic investments in infrastructure also played a significant role insupporting economic activity. A more accommodative monetary policy – includingthe State Bank of Vietnam’s policy interest rate cut from 6 percent to 4 percent– brought an extra stimulus.

According toCredendo, Vietnam remainslargely immune to the further waves of the virus that are currently affectingmany parts of the world. Hence, the Vietnamese authorities will take time tovaccinate the population. 

Vietnam is confidentlylooking ahead to continue the country’s economic success story, which has beencharacterised by average growth of 6.8 percent in the past two decades, itsaid.

The study stressed that an impressive outcome in the COVID-19 context lies in the factthat Vietnam’s economic and financial risks have not increased. Even though GDPgrowth reached its lowest level since the mid-1980s, it was in positiveterritory in 2020 – unlike for most of the country’s peers in the region – andis expected to accelerate strongly this year and towards 6.5 percent – 7 percentin 2022. 

Meanwhile,Vietnam’s external debt ratios remain low and debt service has barelyincreased, whereas the current account surplus is persisting despite somenarrowing, it said, adding that post-COVID-19 prospects are positive for those risk factors on the back of a globaleconomic recovery. 

So far, Vietnam has been benefiting from the changingcommercial environment and ongoing supply chain re-organization.
The study said COVID-19has shaken global supply chains, which could benefit Vietnam in the long term,as it is seen as a stable investment location for business relocation inSouth-East Asia.

In addition, freetrade agreements (FTAs) that Vietnam signed in the period 2019-2020 such as theEuropean Union-Vietnam FTA (EVFTA) or the Regional Comprehensive EconomicPartnership agreement (RCEP) will help boost its trade and FDI inflows.

Over the past few years,Vietnam has become a magnet for the biggest multinationals such as Samsung andApple, which are attracted in particular by strong growth prospects, a low-costworkforce and an investment-friendly climate, to set up large manufacturingsites.        

Credendo also stressed that at the 13th National Congress of the Communist Party of Vietnam, which ended inearly February, the general political direction for the comingyears was confirmed, with the economy and its continued liberalisation as a keypriority and guarantor of the stability of the one-party regime. 

During the COVID-19 pandemic,Credendo has kept its political risk ratings unchanged. The ST political riskrating is likely to remain at a solid 2/7 thanks to resilient liquidity. It forecast that the assessment will beimproved further after the COVID-19 pandemic ends, the global economic situation normalises andVietnam’s strong economic momentum resumes. 

Credendo is a European creditinsurance group with its offices across the world. This group operates in allareas of commercial credit insurance and political risk insurance, as well as provides risk insurance products worldwide./.