A corner of HCM City (Photo: VNA) According to Nguyen Duc Hien, Vice Chairman of the Party Central Committee’sEconomic Commission, there were unpredictable factors that would have asignificant impact on the country’s socioeconomic development.
Many international organisations forecast that global economicgrowth would slow down with regions and countries at risk of falling intorecession, Hien said.
Some of 10 countries and territories that accounted for more than71% of Vietnam’s export revenue, including the US, the Republic of Korea (RoK),Japan, the Netherlands, Germany, the UK and Hong Kong, were forecast to face amild economic recession in the short term. This would affect some industries ofVietnam such as garment and textile, footwear and furniture, he said.
Among 10 countries and territories which accounted for more than80% of Vietnam’s import revenue, Japan, the RoK, the US, Malaysia, Taiwan andIndonesia were forecast to be affected by the economic recession in 2023.
Regarding investment, among the 10 largest foreign investors in Vietnamwhich altogether accounted for 93% of the total FDI into the country, exceptfor China and Thailand, the rest, including Singapore, the RoK, Japan, Taiwan,Hong Kong and the US were forecast to show signs of falling onto recession atdifferent degrees.
The Vietnamese Government’s goals of achieving economic growth of6.5% and inflation at 4.5% would be a challenge if the management was notflexible enough, he stressed.
It was necessary for Vietnam to develop different scenarios toraise solutions on both short and long terms to maintain macroeconomicstability and ensure major balances of the economy, he said.
Nguyen Xuan Thanh from Fullbright University Vietnam said thatdifficulties would remain in the second half of this year. However, there wasstill light at the end of the tunnel for Vietnam to change policies and solvethe internal problems of the Vietnamese economy.
Looking at the monetary policies of counties around the world, Thanhsaid that the US Federal Reserves (Fed) might continue to raise rates. In theworst scenario, Fed could raise rates in February, March and May, and thenmaintain the rate at 5-5.25% to the end of 2023.
The second factor was the border reopening of China after threeyears of being shut to fight the COVID-19 pandemic. He said that from April orMay, the reopening would give a push to domestic demand, create opportunitiesfor Vietnam’s exports and attract Chinese tourists.
In strategic competition, Vietnam relied on public investment anddomestic consumption to compensate for the decline in exports. However, inorder to have a bright economic picture, it was also necessary to promote thedisbursement of FDI and public investment, Thanh said, adding that the monetarypolicy must be flexible and interest rates must be lowered.
Can Van Luc, a member of the National Financial and MonetaryPolicy Advisory Council, said that public investment was increased in 2023 asan important growth driver.
Under the socio-economic recovery programme, developmentinvestment in 2023 was estimated at nearly 739 trillion VND, accounting for 35%of the total State budget expenditure and more than 38% higher than the plan in2022.
A notable point in 2023 was that Vietnam was accelerating economicrestructuring, improving institutions with a series of laws to be discussed foramendments such as the Law on Land, the Law on Housing, the Law on Real EstateBusiness, and the Law on Credit Institutions.
“Basically, Vietnam’s macro foundation is much stronger thanbefore and continues to be relatively stable," Luc said.
"With experiences in fighting against the pandemic, riskmanagement and crisis handling and medium fiscal risk, there was room forgrowth in 2023.”
Former Director of the General Statistic Office Nguyen Bich Lamsaid that developing a transparent institution would give a significant impetusto drive economic growth this year.
Standing Deputy Minister of Foreign Affairs Nguyen Minh Vu said inthe context of rising global uncertainties, the Vietnamese economy with highopenness was strongly affected but it also proved its adaptability andresilience.
He pointed out that there were three notable trends in the worldeconomy. Firstly, the global economy was losing its growth momentum andfacing the risk of a technical recession. The International Monetary Fundforecast that one-third of the world’s economies would be in recession in 2023with growth drivers such as export, investment and global consumption expectedto decline.
Secondly, structural transformations would continue to reshape theglobal economy with new principles and rules in governance such as green tradeand global minimum tax. In that context, the strategic competition of majoreconomies would intensify.
Thirdly, the Asia – Pacific region, including Southeast Asia wasconsidered the driving force for global economic growth.
“The picture is not all grey," he said.
"There are opportunities. If we could tune into the newtrends and take advantage of new growth drivers from the green economy anddigital transformation, we can optimise resources to overcome challenges. It’salso time for enterprises to create breakthroughs.”/.
VNA
