VIETNAM ECONOMIC REPORT 2023 BY EMBASSY OF SWITZERLAND SWITZERLAND

In 2022, Vietnam's economy experienced a strong but short-lived rebound, with GDP growth estimated at 8%. However, already in Q4-2022, inflationary pressures, weaker internal consumption, dropping export demand, labour lay-offs, as well as sluggish public investment were pre-announcing a more difficult 2023. The first quarter in 2023 confirmed a tumultuous period for Vietnam, marked by continuing decline in exports and investments. 2023 growth prospects have been reduced.

Vietnam’s intensified anti-corruption fight, which led to the arrests of high-level officials and CEOs, incl. the resignation in early 2023 of the country’s President, led to a sharp slow-down in decision-making. On the positive side, decision-makers increased meetings with stakeholders, including major foreign investors in Vietnam.

Vietnam’s commitment to net zero carbon emissions by 2050 is challenging, all the more so, given growing energy needs and the lack of a modern electricity grid. The long expected Power Development Plan/PDP 8 for 2021-30, approved this month, should be now opening the way for Vietnam to draw on the USD 15.5 billion “Just Energy Transition Partnership” concluded with the G7, EU and Norway in Dec. 2022.

Economic relations between Switzerland and Vietnam remained stable during the Covid period and 2022. With Swiss trade and investment to Vietnam partly recorded outside of Switzerland - in the NL, Singapore or else -, figures do not necessarily reflect the correct size of bilateral economic cooperation. Swiss direct investments in Vietnam are estimated at around USD 2 billion (21st rank among foreign investors). On trade, Vietnam, a renowned manufacturing hub for electronics (smartphones, etc.) and shoes/textiles as well as agro-exporter, benefits from a comfortable surplus.

TABLE OF CONTENTS

1 ECONOMIC OUTLOOK AND ECONOMIC POLICY DEVELOPMENTS ........................................3

2 PRIORITY SECTORS AND OPPORTUNITIES FOR SWISS COMPANIES ...................................4

3 FOREIGN ECONOMIC POLICY .......................................................................................................5

3.1 Vietnam’s policy and priorities ..............................................................................................5

3.2 Outlook for Switzerland (potential for discrimination or comparative advantage) ..........6

4 FOREIGN TRADE .............................................................................................................................6

4.1 Developments and general outlook.......................................................................................6

4.1.1 Trade in goods .........................................................................................................................6

4.1.2 Trade in services (only limited data available) .....................................................................7

4.2 Bilateral trade ...........................................................................................................................7

4.2.1 Trade in goods .........................................................................................................................7

4.2.2 Trade in services (no data available).....................................................................................7

5 DIRECT INVESTMENTS ..................................................................................................................8

5.1 Developments and general outlook.......................................................................................8

5.2 Bilateral investment ................................................................................................................8

6 ECONOMIC AND TOURISM PROMOTION .....................................................................................8

6.1 Swiss foreign economic promotion instruments .................................................................8

6.2 Vietnamese interests in Switzerland .....................................................................................9

ANNEX 1 – Economic structure ............................................................................................................. 10

ANNEX 2 – Main economic data ............................................................................................................ 11

ANNEX 3 – Trade partners of Vietnam in 2022 ..................................................................................... 12

ANNEX 4 – Bilateral trade: Switzerland – Vietnam ................................................................................ 13

ANNEX 5 – Main investing countries ..................................................................................................... 15