M&As likely to play key role in Vietnam economy in 2022: DSA

Domestic firms have led the M&A market. The government has also eased some requirements in the investment and enterprise laws to facilitate M&A deals. As Vietnam hopes to recover its economy, further robust M&A activities can be expected in 2022.

With a vibrant economic climate, Vietnam remains a strong candidate for investment from the Association of Southeast Asian Nations (ASEAN) and beyond, Vietnam Briefing said.

DSA said Vietnam’s free trade agreements (FTAs) are another pull factor that investors can bank on. Vietnam has used its participation in FTAs as an instrument to ensure increased economic power and financial security. This will ensure that Vietnam’s economic development will continue to shift away from exporting low-tech manufacturing products and primary goods to more complex hi-tech goods like electronics, machinery, vehicles, and medical devices.

The Regional Comprehensive Economic Partnership (RCEP), which officially came into force on January 1, 2022, will reduce tariffs and set trade rules and help link supply chains, particularly as governments grapple with COVID-19 effects.

As Vietnam moves to become a high-tech manufacturer, the RCEP can help local firms increase exports and attract high-quality goods for its consumers. In addition, with the demand for Vietnam’s exports like agriculture and fisheries products, Vietnam is set to benefit, it said.

Due to the pandemic, the government unveiled several support packages for businesses and individuals to help spur the economy. Businesses should prepare for 2022, using these government measures to improve cash flow, it said.

Several issues that Vietnam faced in 2021 are likely to continue into 2022. Nevertheless, DSA said a more targeted and focused development in key areas will present more opportunities for growth, particularly in areas that help prop up Vietnam’s bottom line of economic stability and people’s livelihoods.

While Vietnam has suffered, its economy is on course to record positive growth in 2022. Given its investor-friendly policies, relative economic and political stability, cost efficiency, and consumer demand prospects, Vietnam is likely to continue gaining from supply chain restructuring in Asia in addition to attracting a new range of investors, it concluded.

ALCHEMPro News Desk (DS)