This expert shared with the press that, despite difficulties, Vietnam's economy in 2023 will still maintain a growth rate that many countries in the world can only dream of.
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| Mr. Andrea Coppola, Chief Economist of the World Bank in Vietnam. (Photo: NVCC) |
How do you assess Vietnam's economic picture in 2023?
The global economic downturn has impacted Vietnam’s export demand, making 2023 one of the most challenging years of the 21st century. At the same time, Vietnam’s dependence on demand from its trading partners has also exposed it to the general state of the global economy.
As a result, after the difficult Covid-19-affected years of 2020 and 2021, Vietnam's economic performance this year is the weakest since the Asian financial crisis in the late 1990s.
However, despite the challenges, I see a gradual recovery. Vietnam is one of the most open economies in the world. Strong trade relations with the rest of the world have been a source of strength and success for the country over the past period.
I assess that Vietnam's economy in 2023 is positive. For the whole year, Vietnam's public investment increased by about 35% compared to the previous year, helping to maintain economic growth.
What keywords would you choose to describe Vietnam's economy in 2023?
Resilient! Given the characteristics of the Vietnamese economy, the global economic recession was a major negative shock to the country. However, despite the difficulties, the economy has maintained a growth rate that many countries in the world can only dream of.
Is it undeniable that the business community still faces numerous challenges?
Yes. There are two main reasons for the difficulties of the business community. The first is external factors. The global economic recession has had a strong impact on Vietnam's export demand. This shock has affected many businesses that are producing and trading export goods. Workers in this sector are very important to the economy.
Second, domestic factors. The difficult situation that many Vietnamese workers are facing has led to a slowdown in domestic consumption. This affects not only businesses in the manufacturing sector but also other sectors of the economy.
So what has caught the international community's attention in Vietnam over the past year? What are the strongest points of the economy?
Vietnam has attracted much international attention in 2023. Global media have published many articles highlighting Vietnam's achievements and potential. Visits by world leaders to the country have further attracted the attention of the international community.
Vietnam is considered an attractive destination for international investors thanks to its economic and political stability and ability to integrate into the global economy.
I recall an article published in the Financial Times in July that pointed out the opportunities for the Vietnamese economy, emphasizing: “After decades of promise, the moment for the Vietnamese economy has finally come!”
In such a context, it is important for the S-shaped country to continue to strengthen the business environment and attract the interest of private investors, thereby making the most of the impact of global geopolitical developments on international investment and trade.
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How do you assess the economic situation in 2024?
The international environment is expected to remain challenging in 2024. Global economic growth is expected to slow further following the global recession in 2023. The upcoming weak performance is likely to be the result of the lagged effects of the ongoing tightening of monetary policy, tight credit conditions, and weakening global trade.
Key headwinds for the year ahead include geopolitical risks, the impact of conflicts on energy prices, financial stress related to rising long-term interest rates and weaker-than-expected economic activity in China.
What Vietnam needs to do is to reduce its vulnerability to external shocks and leverage its internal strengths and domestic productivity to support economic growth.
Is the target of 6-6.5% GDP growth for next year a challenge for Vietnam?
With global economic growth forecast to continue slowing in 2024, I believe Vietnam’s GDP growth target of 6-6.5% is ambitious. Despite the global downturn, the country’s export demand may gradually improve and the World Bank forecasts economic growth to increase by 5.5% next year.
Such growth can only be achieved if domestic demand, consumption and investment accelerate further. Authorities can play an important role in supporting the economy through fiscal policy, accelerating the implementation of infrastructure projects and public investment projects.
In addition, the Vietnamese people are the country's greatest internal resource. The business community and workers have helped the Vietnamese economy grow sevenfold over the past 30 years.
To sustain this rapid growth, in the face of a challenging external environment, I believe it is necessary to continue to promote private sector development and improve productivity. I propose to redouble efforts to develop human resources by upgrading the skills of the workforce. At the same time, develop physical capital through public investment in transport and energy infrastructure to further enhance the competitiveness of Vietnam's private sector.
What should Vietnam do to overcome challenges in 2024?
According to our forecast, export demand for Vietnamese goods from the rest of the world will recover in 2024, but will not be as strong as before. This challenging situation may persist in the near future.
In that context, Vietnam needs to take advantage of its internal strengths and promote productivity growth of the domestic economy to turn the challenges caused by the global economic recession into opportunities to further strengthen its economic growth model.
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