Illustrative image (Source: VNA)Hanoi (VNA) – The year 2018 ends withseveral records, which are the highlights in the national economic panorama,laying the firm foundation for the country to strive to successfully implementthe Resolution of the 12th National Party Congress and Resolution 142/2016/QH13on the five-year socio-economic development plan for 2016-2020.
The nation’sGDP grew by an 11-year record 7.08 percent, double the inflation rate, whiletrade surplus topped 7.2 billion USD, the highest ever figure. Disbursement offoreign direct investment (FDI) also reached a record 19.1 percent. Inflationwas kept under 4 percent for the third consecutive year.
*Growth in most fields
“We have been able to achieve growth in most fields inthe context of complicated international situation, particularly maintainingmacro-economic stability and a high growth rate, thus winning the confidencefor nearly 100 million people,” Prime Minister Nguyen Xuan Phuc said about theefforts of the entire political system, localities, the business community andpeople nationwide.
The world economic situation saw many unfavourabledevelopments in 2018, including the rising trend of trade protection, theUS-China trade war, rising interest rates, and complex fluctuation of oilprices.
In the country, many outstanding problems remainedunsolved, such as limited productivity, slow disbursement of investment capitaldespite improvements, and lower-than-expected economic restructuring, whichhindered the growth pace.
In such circumstances, the good economic indicatorsdemonstrated the success of the Government’s governance and the great effortsof the business community and the people.
The highlights in the Government’s management in 2018were the Resolutions 19/NQ-CP and 35/NQ-CP on improving the businessenvironment and facilitating enterprises’ development, along with Resolution139/NQ-CP on a plan of actions to cut costs for enterprises.
The effects of the Government’s actions can be seen inthe number of new businesses established during the year – 131,275 newenterprises, up nearly 5,000 from 2017.
Improvements in Vietnam’s business and investmentenvironment during the year were recognised by the international community. TheWorld Economic Forum, in its Global Competitiveness Report 2018, ranked Vietnam77th among 140 economies.
The European Chamber of Commerce in Vietnam (EuroCham)also noted significant enhancement of the business climate in the country. The UK-based financial and business information firm FTSERussell has added Vietnam’s equity market onto its reclassification watchlist,a sign that could help raise the status of the Vietnamese market in the globalmarkets
Vietnam also made great efforts to perfectinstitutions, mechanisms and policies towards meeting international practices.
According to Finance Minister Dinh Tien Dung, thecountry has carried out its commitments on import-export tariffs and opening ofthe financial service market in line with international agreements to which itis a member.
Such moves have helped Vietnam attract FDI and boostforeign trade. As of the end of 2018, the country has 27,353 valid FDI projectsfrom 130 countries and territories with a total 340 billion USD in registercapital. The FDI sector accounts for a quarter of total social investment andmore than 70 percent of export value, creating 8.5 million jobs. Meanwhile,foreign trade revenue in 2018 totalled 482.2 billion USD, also a record figure.
The economic restructuring has resulted in lessdependence on the exploitation of minerals and natural resources as well ascredit.
According to the Finance Ministry, the contribution ofcrude oil to the State budget has decreased continuously, from an average 30percent during 2006-2020 to 4 percent this year, and is estimated at 3.2percent in 2019.
Meanwhile, credit growth was at 13 percent this yearto December 14, lower than the level in 2017.
* Seeking new driver for growth
Think tanks and experts said Vietnam faces severalrisks and challenges in 2019. They pointed to the pressure created by the USDexchange rate and the world prices, the tension from the prolong trade frictionamong big economies, rising trade protectionism.
The enforcement of international trade deals to whichVietnam is a member brings not only opportunities but also big competition fordomestic production and business.
As 2019 is the key year for the success of the2016-2020 socio-economic development plan, experts said the country needs toseek more driving forces for economic growth, first of all in the new stage ofinternational integration.
Next year Vietnam will complete the roadmap for itscommitments as a member of the World Trade Organisation and the ASEAN Trade inGoods Agreement, and will begin to perform its promises under several majorfree trade deals including the Comprehensive and Progressive Agreement forTrans-Pacific Partnership (CPTPP) and the Vietnam-European Union Free TradeAgreement with deep and comprehensive commitments.
Those FTAs are hoped to create a driving force for theVietnamese economy through the high openness of the economy and moreopportunities for FDI attraction.
The strong development of the private economic sectorwill also help drive the domestic economy forward. In addition, therestructuring inside each economic sector is expected to boost economic growthboth in speed and quality, according to Director General of the GeneralStatistics Office Nguyen Bich Lam. He cited as example the shift from low-valuecrops and animals to those of higher value in the agricultural sector, or theshift to industries making products with high added value and export value.
* Optimize every opportunity
At a year-end working session, the Prime Minister’sadvisory team noted that the economy has great potential while many newopportunities are expected to come next year. They said the growth pace can bemaintained in the next two years if the country can take effective measures tooptimize opportunities and better tap the economy’s potential.
The team presented three scenarios for the economyduring 2018-2020, under which the economy would grow at an average 6.86 percenta year (scenario 1), 6.91 percent (scenario 2) and 7.06 percent (scenario 3).The team also recommended striving for a growth rate of 6.9 – 7 percent and aninflation rate of under 4 percent in 2019.
In order to realise these targets, the advisory teamsaid the manufacturing-processing industry and services must be made the maindrivers of the economy and must achieve a higher growth than in 2018. Strongermeasures are also needed to promote the private sector.
The team proposed that the Government focused itsleadership on removing the four key bottlenecks, which are those inimplementing large-scale projects, developing the private economic sector,firms’ investment in agriculture and better tapping social resources.
They urged the Government to put strong pressure onministries, agencies and local administrations in the implementation ofinstruction of the Government and the Prime Minister.-VNA
VNA
