 |
| Prof. Dr. Andreas Stoffers, FNF Country Director in Vietnam at the Workshop to announce the Vietnam Annual Economic Report 2023. (Photo: GT) |
The workshop was co-organized by the Vietnam Institute for Economic and Policy Research (VEPR), under the University of Economics and Business - Vietnam National University, Hanoi and the Friedrich Naumann Foundation (FNF) in Vietnam.
Economy could grow 6.51%
Speaking at the opening of the workshop, Prof. Dr. Andreas Stoffers, Country Director of FNF in Vietnam, stated that Vietnam has experienced unprecedented economic growth. According to the latest report of the Heritage Foundation, Vietnam is now one of the economically free countries.
According to Prof. Dr. Andreas Stoffers, Vietnam's economic growth rate is also impressive. He emphasized: "Next to Poland, Vietnam is the fastest growing country in recent years and this trend has not ended. The reason is that this country has not deviated from its basic values during the crisis caused by Covid-19".
The measures to combat Covid-19 have caused a major crisis worldwide and disrupted global supply chains and value chains. As a country with high international economic integration, FNF's Country Director in Vietnam said that this is a difficult time for Vietnam.
According to the Vietnam Economic Annual Report 2023, the Vietnamese economy has been showing some problems. The industrial and construction sector has slowed down sharply since the third quarter of 2022 and in the first 5 months of 2023, the industrial production index (IIP) is estimated to decrease by 2% compared to the same period last year.
Inflation in Vietnam remains high despite cooling down due to pressure from global inflation and rising input prices. In the first 5 months of 2023, the Consumer Price Index (CPI) also increased by 3.55% compared to the same period in 2022. According to the report, the core inflation increased by 4.54%, which is the unknown factor for Vietnam's macroeconomic stability management in the remaining period of 2023.
At the same time, the exchange rate in Vietnam has fluctuated strongly since the end of the third quarter of 2022, peaking in November 2022. Importing enterprises have expanded their USD foreign exchange reserves to hedge against future exchange rate risks, while exporting enterprises have increased their foreign currency holdings in anticipation of opportunities to sell at higher prices. The State's foreign exchange reserves have also shown signs of a sharp decline.
However, the exchange rate between the USD and VND in early 2023 stabilized again due to the US Federal Reserve (Fed) slowing down the rate of interest rate increases and sustained inflation in the US, causing the USD to depreciate sharply in the domestic and international markets.
In addition, the burden of interest on businesses, the Russia-Ukraine conflict and Vietnam's exports heavily dependent on foreign direct investment (FDI) enterprises are also challenges for the economy in the rest of this year.
However, the report said that there are four opportunities for growth in 2023 for Vietnam's economy. Specifically: Recent economic management policies show determination to boost the domestic economy; increasing import and export conditions for many industries in the context of China's reopening; opportunities from the wave of investment chain shifts and free trade agreements (FTAs) continue to be the driving force for trade growth.
 |
| Experts discuss at the Workshop to announce the Vietnam Annual Economic Report 2023. (Photo: GT) |
In the above difficult context, the report presents three scenarios for Vietnam's economic growth in 2023.
In the low scenario, Vietnam's GDP growth rate in 2023 will only reach 5.54%. In the baseline scenario, the GDP growth rate will be 6.01%. In the high scenario, the GDP growth rate in 2023 will be 6.51%.
6 solutions
To overcome difficulties, experts at the Workshop stated that Vietnam needs to improve policies in macro management, including 6 solutions.
Firstly, identifying the key and top priority task in the coming time is to balance the goal of maintaining macroeconomic stability while at the same time seeking policy solutions to promote economic recovery/recovery of business production quickly and strongly.
Second, it is necessary to continue to more effectively implement fiscal policies, especially economic recovery support packages, targeting sectors with positive impacts.
Third, monetary policy needs to maintain a state of adaptation to the current state of the economy with many risks, continue to balance financial risks with supporting economic recovery, and unblock the circulation of capital flows.
Fourth , resolutely improve the effectiveness of policy and law enforcement by public authorities at all levels, improve the business environment and enhance competitiveness.
Fifth, promote programs to improve business quality, labor productivity and production and business efficiency.
Sixth, it is necessary to develop independent policy research in coordination with independent research institutes, ministries, sectors, and business associations to research and propose solutions to immediately resolve bottlenecks and difficulties in public investment, reform, and improve the business environment, especially removing barriers, facilitating and encouraging the development of domestic private enterprises, and promoting the connectivity and autonomy of the Vietnamese economy.
Source
Comment (0)