Impact of Inflation on Vietnam FDI and Export Value after the COVID-19 Pandemic

Vu Quang Vinh, Do Huu Hai, Le Ngoc Thong


In the first quarter of 2022, many countries in North America and Europe experienced a rapid increase in the inflation rate. High inflation is expected to slow down post-pandemic economic growth expectations in Vietnam and many other countries. This study synthesizes the latest economic data collected in Vietnam along with several developed countries around the world. The purpose of this study is to analyze the risks that inflation can affect two of the important drivers of Vietnam's economic development after the COVID-19 pandemic. The two growth drivers of Vietnam's economy analyzed are foreign direct investment (FDI) inflows and Vietnam's exports. This research uses a combination of methods such as statistics, synthesis, interpretation, comparison, and inductive. The authors use EViews 11 to obtain lag optimal-order selection statistics for Vector Auto-regression (VARs). Granger causality test and impulse response were also used. This study indicates that the expected growth in the value of Vietnam's exports to other countries and the number of FDI inflows into Vietnam may be negatively affected by high global inflation. The difficulty in exporting challenges the recovery of Vietnam’s economy after the COVID-19 pandemic. However, this paper finds positive internal signals that can help Vietnam's recovery. Besides, this study provides strategies that can be applied in Vietnam to limit the risks posed by high inflation to attract FDI and export capital flows.


Keywords: inflation, foreign direct investment, export, COVID-19 pandemic.




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