Covid has disrupted but not derailed Vietnam’s expanding role in global supply chains and growth prospects, the head of the American Chamber of Commerce in Hanoi said Tuesday.
The Southeast Asian nation has struggled to maintain manufacturing and exports in the face of surging COVID-19 cases, one of the key fronts in the battle to keep international trade running for goods including clothes, computer chips and cars.
“Even with the supply chain and shutdown problems they have because of Covid right now, Vietnam’s still going to do very well economically and it’s becoming, every day, a more important piece of the global supply chain — especially for things that affect American consumers,” Adam Sitkoff, executive director of the chamber told Bloomberg Television’s Haslinda Amin and Rishaad Salamat.
Though “Covid got in the way” of further supply-chain gains and with the full vaccination rate under 3%, he still sees Vietnam attracting investment, including from further relocations out of China. He highlighted Vietnam’s best-in-Asia growth performance last year, when it expanded 2.9%.
For now, the Chamber is aiming to ensure that Covid policies are “the least disruptive to business as possible,” as firms look for ways to smooth out deliveries leading into the critical year-end holiday season, Sitkoff said.
Analysts at Australia & New Zealand Banking Group Ltd. sounded a similar tone in a report Tuesday, highlighting Vietnam’s longer-term prospects despite the current “deep slump” in domestic demand.
“Beyond the near-term challenges, Vietnam’s medium term economic prospects remain favorable,” analysts including Dhiraj Nim and Khoon Goh wrote in the report, which also warned of downside risks to ANZ’s 5.2% full-year 2021 growth forecast. “The pandemic has not changed the country’s attractiveness as a manufacturing hub. There is also ample room for policy support to nurture economic recovery further.”
Timely, incisive articles delivered directly to your inbox.