A factory of the Xuan Hoa Furniture Company (Photo: VNA) Hanoi (VNA) – Three economic growth scenarios forthe country have been revealed by the National Centre for Socio-EconomicInformation and Forecast (NCIF) and the Ministry of Planning and Investment.
Accordingly, Vietnam’s annual economic growth rate couldrange from 6.2 percent in the worst situation to 6.85 percent under the mostoptimistic forecast during 2016 to 2020.
Under the pessimistic scenario, the global economy and tradeshrink dramatically. Risks posed by public debt and budget overspending keepgrowing, while the country continues to rely on the old growth model amidst fiercercompetition. As a result, the economy is projected to grow at 6.2 percent onaverage.
The most likely scenario assumes that global economic growthremains stable, at about 3 percent, while State investment’s disbursement andeffectiveness continue to be improved, and legal procedures and investmentclimate get better. In such context, the country’s average economic growth isestimated at 6.55 percent a year.
In the high-growth scenario, which is moreunlikely than the two others, annual GDP growth will average 6.85 percentduring the period provided that economic restructuring is carried out morestrongly, especially in management mechanisms, thus improving publicinvestment’s effectiveness, and labour productivity is raised to be at par withthe ASEAN average. In that case, the economy would not only maintainsustainable development, but also create prerequisites for the following fiveyears.
Dang Duc Anh, head of NCIF’s analysis andforecast division, predicted that Vietnam’s economy will escape from recessionand begin a new period of recovery in 2016-2020.
Accordingly, industry and construction willenjoy vigorous growth and become the main recovery force for the whole economy.But this sector will still face challenges such as higher prices of inputmaterials such as coal, electricity and oil – a big disadvantage forbusinesses, especially processing firms. Enterprises’ modest competitiveness,products’ low added value and small support industries will also hinder economicgrowth.
He said problems will arise when other countriesapply more technical barriers and stricter quality requirements for imports,particularly agro-forestry-fishery goods.
In agriculture, aside from increasing qualityrequirements, low productivity and competitiveness along with sluggish pace of restructuringand science-technology application will also hamper this sector’s expansion.
Meanwhile, the services sector will benefit frompositive impacts of the ASEAN Community’s commitments and free trade agreements,with stronger consumption demand and trade promotion activities, Anhforecast.-VNA
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