Economic recovery programme needs at least three years: Expert

The economy still faces many difficulties and serious consequences from the COVID-19 epidemic. (Photo: VNA)

Hanoi (VNA) - Assessing Vietnam's economic overview in 2021 and prospects in 2022, Dr. Tran Thi Hong Minh, Director of the Central Institute for Economic Management (CIEM) acknowledged that the economic situation at home and abroad in the past ten months continued to have fast, complicated and unpredictable developments due to COVID-19 epidemic, geopolitical competition, and trade tensions, among other. However, the economy also showed positive signs.

Therefore, the expert said she believed that the ability to catch up with an extensive programme of economic recovery and development will need a time duration from now until at least 2023. Apart from removing difficulties, creating motivation in the short term, the programme needs to ensure macroeconomic stability, laying a foundation for stronger economic institutional reform in the next 3-5 years, she explained.

The head of CIEM emphasized that Vietnam’s economy will face various difficulties and serious consequences from the COVID-19 epidemic, which has no signs of stopping in the near future.

Export markets have used technical measures to limit imported goods, including Vietnamese goods. On the other hand, the risk of supply chain disruption has made costs hike strongly, affecting both exporters and domestic enterprises.

In addition, there is still a weakness in the management work while the quality of policies supporting people and businesses is also still limited and inadequate despite a lot of efforts to improve it. Meanwhile, the epidemic prevention work in some localities has not been properly and synchronously implemented.

According to the leader of CIEM, solutions made so far to support businesses, such as tax extension and postponement, debt rescheduling, interest and fee exemption and reduction, are not strong enough to support businesses.

A number of problems emerge during the implementation of some regulations on supporting labourers and employers (Illustrative image)

Regarding what may affect Vietnam's economy in 2022, Dr. Tran Thi Hong Minh said the economic outlook may be influenced by a number of factors.

The first factor is the ability to control the epidemic. If Vietnam can control the pandemic fast and effectively and have an appropriate economic reopening roadmap based on the rate of vaccination and a close cooperation from the business community and people, the consequence on the economy, especially economic hubs, will be reduced.

The second factor is the ability to guarantee production recovery. Tran Thi Hong Minh said a better disbursement of public investment and a more efficient use of credit capitals for the manufacturing sector will have a good effect on the economic recovery and help boost production. Besides, if the production recovery process goes in parallel with an effective cooperation with foreign investors, the risks of supply chain disruption will be limited a lot.

Minh noted that the production recovery is also an important condition for Vietnam to take advantage of the world economic recovery as the country has signed important free trade agreements, such as EVFTA, CPTPP and RCEP.

The third factor is the ability to engage in an extensive programme of economic recovery and development. Based on available information and research data, the CIEM leader said she believed that the programme needs at least 3 years to be implemented. Additionally, policy makers should seek new economic models and spaces instead of focusing on fiscal-monetary stimulus packages as usual. If Vietnam can accomplish those tasks, the country’s economy will have more conditions to recover and go towards a sustainable development, improving internal capacity as well as resilience and competitiveness in the future, the head of the prestigious economic research institute noted./.