Processing shrimps for export. (Photo: VNA) Hanoi (VNA) – Amid the global economic recession, Vietnam’sindustrial growth in 2023 may experience a slight decline, but agricultural outputis expected to increase modestly, according to experts.
AndrewJeffries, Country Director of the Asian Development Bank (ADB) in Vietnam, saidwith growth-supportive policies through monetary easing and a substantialvolume of public investment expected to be disbursed in 2023, Vietnam isexpected to cope with current challenges such as the global economic recessionand geopolitical tensions.
Heforecast that Vietnam's economic growth rate willslightly drop to 6.5% in 2023 and increase to 6.8% in 2024. Public investment will be akey driving force, stimulating the recovery and economic growth in 2023 and2024, as well as boosting the construction sector and other related economicactivities. Along with the swift shift to monetary easing policies in March,the disbursement of public investment is expected to have multidimensionalimpacts, creating strong growth momentum for the economy.
Accordingto him, the prolonged COVID-19 pandemic since 2021 has exposed structuralissues and also posed significant challenges to the Vietnamese economy. Thedomestic capital market is under pressure. Although the market instability hasyet to affect the banking system due to banks' resilience, risks are increasinglypresent, Andrew said, adding that inthe long term, financial sectorreforms should be continued to reduce the economy's reliance on bank funding and improve transparencyin the capital market.
Meanwhile, Country Director for WB Vietnam Carolyn Turk said unlike many other countries, Vietnam still has roomto adopt measures to propel growth. The effective implementation of key publicinvestment projects is a key driver of both short-term and long-term growth.Additionally, fiscal and monetary policies must be synchronous to support theeconomy and ensure effective macroeconomic stability.
TheWB forecast that Vietnam's economic growth in 2023 may reach 6.3%, following ahigh of 8% in 2022. This decline is attributed to a slowdown in the servicesector's growth, as well as rising prices and interest rates impacting both investorsand households. However, the growth is expected to rebound to 6.5% in 2024 asVietnam's major export markets recover.
She said bothdomestic and external challenges require the Vietnamese Government to adoptcautious policies based on evidence and data. These policies should includemanaging the linkage between growth and inflation, and closely monitoring thefinancial sector. The favourable conditions for a faster global growth recoverymay occur sooner than expected, which would boost the export situation andlikely contribute to an overall increase in economic growth.
Nhon - Hanoi urban railway line in Cau Giay district. (Photo: VNA) In her opinion, innovation has the potential to achieve promising export turnover.Though accounting for only 9% of the total service export earning and contributing 6.4%of employment in the service sector, the service sector has the highestproductivity in the economy.
Shesuggested that appropriate policies and actions are needed to supportsmall-sized enterprises, remove barriers to trade in services, gradually reducethe use of low technology, overcome the lack of connectivity among otherindustries and sectors. These measures will help accelerate the growth of thissector.
The immediatetask is to remove barriers to trade and foreign investment in the innovativeservice sector, as well as launch reforms to enhance competitiveness andimprove access to finance for domestic enterprises, she said, adding that the Government,along with relevant departments and agencies, should encourage firms togradually adopt technology and innovation in product development and processes.Efforts should be taken to improve the capacity and skills of the workforce andmanagement officials. Additionally, there should be a greater emphasis onimproving the quality of services to further drive growth in sectors whereVietnam has strengths, such as manufacturing and processing./.
