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The GDP of Vietnam in the first half of 2021 has delivered a growth of 5.64% on a year-on-year basis, which is three times higher than the growth numbers recorded in the same period last year. Despite the volatile environment amidst the global pandemic, these figures are a reflection of the coordinated work to prevent the spread of the virus as well as the high productivity levels and a number of growing opportunities which are pushing the economy forward.
Some of the leading sectors of the economy which contributed the most to the GDP growth included agriculture, construction, and services. The construction sector was up 8.36%, services 3.96%, and agriculture 3.82%.
Furthermore, Vietnam’s exports contributed significantly to the economic growth in the first half of the year. For instance, on a seven-month basis, the export revenues reached USD 185 billion, an increase of approximately 25%. In order to further promote exports and improve productivity, the authorities have intensified efforts in the area of free trade deals, export activities, as well as developing the fields of energy and mechanical engineering.
Additionally, the authorities reported a significant increase in the foreign direct investment (FDI) in the first 4 months of 2021, with USD 12.25 billion of new investments, which is almost twice the amount from the same period of last year. With an average project size of approximately USD 6 million, Vietnam is one of the leading destinations in Southeast Asia for foreign direct investment in 2021. With the production and business operations bouncing back from the difficulties of last year, the trends emerging in 2021 look strong. Some of the largest projects and funds originated from Singapore, Japan, and South Korea. Geographically, Long An Province, Can Tho, and Ho Chi Minh City have become the top-3 destinations for foreign capital in the country.
The International Monetary Fund (IMF) expects Vietnam’s economy to grow by 6.5% in 2021, and the strong results of H1 demonstrate that the country is on the right track to achieve this level of growth.
At PHC Advisory, we continuously monitor the recent updates of tax policy in Vietnam. Please feel free to contact us at info@phcadvisory.com for more information.
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