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| Dr. Rainer Zitelmann at the book launch of Reading the Behavioral Psychology of the Rich and Super Rich in Hanoi in September 2022. (Source: Vietnamnet) |
Last year, Vietnam received attention from the international community. In your opinion, what is the bright spot of the economy in 2023?
In my opinion, last year, Vietnam's economic highlights were shown in two areas:
Firstly, the visit of US President Joe Biden and the elevation of US-Vietnam relations to a comprehensive strategic partnership for peace, cooperation and sustainable development are positive signals.
Second, the service sector, supported by a strong recovery in international tourism, is also a bright spot in the economy.
The total number of international tourists in 2023 is estimated at 12.5 million. Meanwhile, the number of domestic tourists is forecast to reach 108 million, exceeding the annual plan by 5.8%. Total revenue from tourism is estimated at VND672,000 trillion, exceeding the plan by 3.38%.
Vietnam was honored in 45 categories of the World Travel Awards 2023, one of Asia's leading tourism awards, including Asia's Leading Destination for the 5th time and Asia's Leading Nature Destination for the 2nd consecutive time.
I have been to Vietnam many times, both as a book presenter and as a tourist. The service in hotels in Vietnam is excellent, no less than in the US or Europe.
Are there still difficulties with the Vietnamese economy, sir?
Rainer Zitelmann is a German historian and sociologist. He has published 28 books in 30 languages. Some of the books published in Vietnamese include: Too exhausted to do something different; Reading the psychology and behavior of the rich and super rich; The rich according to the public's point of view. In his latest book: How Nations escape poverty, Dr. Rainer Zitelmann mentioned the economic success of Poland and Vietnam. |
As mentioned, tourism earnings have increased strongly but this cannot compensate for the decline in the industrial sector (which grew by only 1%). The challenging external environment and weaker domestic demand are slowing economic growth in Vietnam.
The real estate sector also has many problems to solve. New regulations on the bond market make it difficult to access capital and real estate companies are forced to suspend some projects. This has caused consumer confidence to decline.
At the same time, bond regulations have caused significant losses for investors. The lesson from this is that you should not react too quickly to economic problems with new regulations because these regulations can make the problem worse.
The next difficulty is the issue of energy sources. The power outage in the North this past summer has significantly affected investors.
How do you predict economic growth in 2024?
In 2024, the Government is targeting economic growth at 6 to 6.5%, similar to the Asian Development Bank's (ADB) July 2023 forecast.
Meanwhile, credit rating agency Fitch Ratings predicts that Vietnam's economic growth will be only 5.5% next year. The reason is that exports may grow weakly.
Vietnam is a country that depends heavily on exports, so in 2024, the country's economy will "look forward" to how the global economy will develop.
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| The service industry, supported by the strong recovery of international tourism, is also a bright spot in Vietnam's economy. Images of Autumn in Hanoi. (Source: Thanh Nien) |
How do you evaluate Vietnam's goal of becoming a developed country by 2045?
Vietnam has had remarkable economic growth. In 1990, the country was one of the poorest in the world. However, the poverty rate has fallen from around 60% (in 1990) to just 4% (in 2023). This remarkable growth is due to market economic reforms.
Despite these successes, the country still has much to do. The Heritage Foundation’s annual index of economic freedom found that despite ongoing reform efforts, Vietnam’s legal framework remains ineffective.
Regardless of global minimum tax requirements, starting a business in Vietnam is still quite expensive. However, the S-shaped country’s currency stability has been maintained relatively well, but inflationary pressures remain an issue to watch.
In my opinion, Vietnam's future will continue to be bright if the country continues its market economic reforms. If Vietnam implements further market reforms, the country can become one of the leading developing countries in Asia.
Vietnam's "miraculous growth story" is not over yet The Global Economic Outlook Report for the fourth quarter of 2023 by the Institute of Chartered Accountants in England and Wales (ICAEW) and Oxford Economics said that despite a slowdown in growth in 2023 and 2024 compared to the pre-pandemic average of 7%, Vietnam's "miraculous growth story" has not stopped. “Amid the global supply chain transformation, Vietnam has emerged as a key ‘winner’. The country’s global merchandise export growth is forecast to continue accelerating over the medium term,” the report said. Vietnam is among the countries with high economic growth rates. Market news site Yahoo!finance published an article stating that Vietnam, China and several Asian countries are among the 20 countries with the fastest economic growth in the world in the past 10 years. The data in the article is based on data from the International Monetary Fund (IMF). Specifically, analysts looked at real GDP growth after adjusting for inflation, based on data from 2012-2022 to calculate the average growth over the past 10 years. Accordingly, with an average real GDP growth rate of 6.1% over the past decade, Vietnam belongs to the group of countries with high economic growth rates. In which, the country's agricultural sector is an important pillar of the economy, contributing to GDP and creating jobs. |
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