According to the World Bank, in 2024, Vietnam has become one of the fastest growing economies in the East Asia-Pacific region thanks to the recovery of exports and domestic demand.
Processing seafood for export.
In the context of the global economy facing geopolitical instability, inflation and natural disasters, Vietnam still rose to become one of the fastest growing economies in the East Asia-Pacific region in 2024.
Mr. Andrea Coppola - Lead Economist and Manager of the Equitable Growth, Finance and Institutions Program of the World Bank (WB) in Vietnam, Laos and Cambodia - in the interview emphasized that the stability of the business environment and the trend of continuous reform are the keys to maintaining Vietnam's investment attraction and growth.
However, 2025 also poses a number of challenges that require Vietnam to make breakthroughs in reforms to maintain sustainable growth momentum and aim to become a high-income economy by 2045.
The global economy has stabilized again.
- Sir, how do you assess global economic growth in 2024 and growth prospects for 2025? In your opinion, what are the bright spots and main growth drivers of the global economy this year?
Mr. Andrea Coppola : The good news is that for the first time after many years of negative shocks, the global economy has stabilized in 2024 with an expected growth rate of 2.7%.
Amid rising financing costs and uncertainties related to geopolitical developments, economic growth in 2024 is underpinned by three key factors:
The first and most important factor is that inflation is gradually cooling in many countries thanks to lower commodity prices, especially energy and food prices. In addition, the delayed effects of the wave of monetary tightening from 2023 have also taken effect. Currently, inflation is closer to the target in many countries, completely changing the economic picture.
Second, amid cooling inflation, central banks around the world have shifted to an accommodative monetary policy stance, cutting interest rates to boost demand and economic activity.
The third factor, strong global demand, has helped to strengthen trade and investment, which are important drivers of global economic activity.
Mr. Andrea Coppola.
Overall, the economic outlook for 2025 is positive, although the two leading economies, the US and China, may slow down, but this will be offset by strong growth trends in the rest of the world. In fact, the World Bank forecasts that global economic growth in 2025 will be even, with recovery recorded in most countries around the world.
- Several global financial institutions have recently lowered their forecasts for European economic growth and warned that retaliatory tariffs could weaken the economic outlook for Asia (China and Southeast Asia) in 2024 and 2025. What is your assessment of this issue, sir?
Mr. Andrea Coppola : I think economic growth in Europe and trade integration are very important for export-oriented economies in the Southeast Asian region. So the weaker growth scenario in Europe and trade restrictions could have a negative impact on export-oriented countries.
However, although economic activity in Europe remains weak, indicators have improved. Eurozone growth has increased from 0.4% in 2023 to 0.8% in 2024. Next year, we expect this to increase to 1-1.5%.
Vietnam's outstanding growth
- In 2024, Vietnam's economy will face many challenges, including geopolitical tensions, rising interest rates in major economies, slowing growth of important trading partners, and impacts from natural disasters. In that context, how do you assess Vietnam's economic situation this year?
Mr. Andrea Coppola : I think that the Vietnamese economy in 2024 has achieved very positive results. Like many other countries in the world, Vietnam has faced increased uncertainty due to geopolitical tensions. However, the economy has still proven resilient in the face of adversity.
In addition, climate change and natural disasters also pose major challenges. We have witnessed the impacts of Typhoon Yagi (Typhoon No. 3) recently, and these are indeed significant challenges for the country. However, despite all this, Vietnam has still achieved impressive results.
The country has not only maintained its economic momentum but also continued its long-term growth trend. In particular, I would like to highlight that in 2024, Vietnam became one of the fastest growing economies in the East Asia-Pacific region thanks to the recovery of exports and domestic demand. This is a commendable achievement, and I believe that this positive trend will continue in 2025.
- Global FDI flows are shifting strongly to new markets. In the context of increasingly fierce regional competition, what is your assessment of Vietnam's competitive position compared to other countries in the region and the world? What factors help Vietnam maintain its competitive advantage and what factors need to be improved?
Mr. Andrea Coppola : This is a very interesting question. I think Vietnam's ability to attract foreign investment is strongly promoted by three main factors.
First, the fact that Vietnam's business environment offers stability to investors is a particularly important factor.
Second, I think the international community also highly appreciates the Vietnamese Government's continuous efforts to improve the business environment. This is also very important.
Third, Vietnam has made good use of its strategic position as a "bridge" between the two superpowers, China and the United States. Thanks to all of this, Vietnam can attract a large amount of foreign investment.
To further enhance its competitive position, I recommend that Vietnam focus on three areas: investing in human capital to upgrade the skills and expertise of its workforce; improving infrastructure, especially transport and energy infrastructure, including clean energy, to reduce the carbon intensity of its exports; and making full use of existing trade agreements, to deepen them by reducing non-tariff barriers, thereby promoting trade and investment flows.
- The WB forecasts that Vietnam's GDP will grow by 6.5% in 2025. In your opinion, what are the main risks that Vietnam needs to identify and overcome to achieve positive growth next year?
Mr. Andrea Coppola : Yes, we expect growth of around 6.5% in 2025, making Vietnam once again one of the fastest growing economies in the East Asia-Pacific region. However, we need to be alert to some risks.
First, the risk of slowing growth in Vietnam's major trading partners such as China, the US, and Europe could impact exports.
Second, asset quality in the banking sector could deteriorate, affecting lending and investment capacity.
Finally, climate change and natural disasters are also factors to consider.
If these risks materialize, monetary policy may no longer have enough room to support Vietnam’s growth, especially as the US dollar is expected to appreciate by 2025.
In this context, fiscal policy should play a key role, including measures such as accelerating public investment disbursements to reduce risks and narrow financial gaps. Authorities can encourage banks to improve their capital adequacy ratios and strengthen the institutional framework for prudential supervision and early intervention.
At the same time, Vietnam should strengthen its financial supervision framework and implement important structural reforms, especially in the education and business environment, which are key to the development of the domestic private sector.
- How do you evaluate the effectiveness of economic policies in 2024? Can you make policy recommendations so that Vietnam can overcome these challenges and achieve the economic growth target set for 2025?
Mr. Andrea Coppola : The Vietnamese government has achieved remarkable success in flexibly using monetary and fiscal policies to stabilize the macro-economy and restore domestic demand. Efforts to improve the business environment, especially simplifying and streamlining regulations, are also commendable.
To sustain sustainable and inclusive economic growth in the coming years, I believe that Vietnam needs to focus on key areas: people, infrastructure and institutions. It is important to continue investing in human capital and improving transport and energy systems - to support competitiveness and reduce environmental impacts, while modernizing institutions to facilitate private sector development. This will help Vietnam move closer to its goal of becoming a high-income economy by 2045.
Finally, I wish Vietnam a healthy, prosperous and happy 2025!
Thank you very much!
According to VNA
Source: https://baobinhduong.vn/ngan-hang-the-gioi-kinh-te-toan-cau-on-dinh-viet-nam-tang-truong-vuot-troi-a338073.html
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