Vietnam’s economy could grow by 7.02 percent in 2018 - Illustrative image (Source: VNA) Hanoi (VNA) - Vietnam’seconomy could grow by 7.02 percent in 2018 under a high growth rate scenario,according to the National Center for Socio-Economic Information and Forecast(NCIF).
The NCIF predicted two economicdevelopment scenarios for Vietnam’s economy this year, including a basicscenario marked by a medium growth rate and a high economic growth rate scenario.
According to the NCIF, the basicscenario is more likely to occur. Under this scenario, investment in the publicsector would help maintain a steady growth rate, playing an important role inregulating the economy.
This economic model could see morerestructure, but the capital and exports are expected to remain the backbone ofeconomic development. The financial system is projected to maintain itsstability, while financial and monetary management are expected to becomeflexible.
Domestic economic growth thisyear could reach 6.83 percent under this scenario, while inflation is projectedto remain low at about 4.5 percent.
The NCIF forecasts a higher GDPgrowth rate under the high economic growth rate scenario if the economy cansustain the results expected in the basic scenario in addition to governmentefforts in economic reform and governance aimed at removing bottlenecks inseveral sectors of the economy, including land policy, credit andadministration.
These efforts are expected tocreate a favorable business environment for the development of the businesscommunity. Under this scenario, the economy could grow by 7.02 percent in 2018,with average inflation at 4.8 percent.
The NCIF said national economicgrowth in 2018 is expected to sustain its upward trend, as global economicdevelopment could have positive effects on domestic economic activity.Government efforts to remove economic roadblocks put in place in 2017 areexpected to have more impact in 2018.
Newly signed free tradeagreements are projected to bring breakthroughs in investment as well as theexpansion of export markets. Localities and ministries have also initiatedefforts to improve the business investment environment. These are expected toboost domestic economic development by the end of the year.
Regarding the development ofspecific sectors, the centre said production and business activities ofenterprises are also likely to improve. Despite facing many difficulties in2017, Vietnamese enterprises have more opportunities to develop in 2018, withtheir focus on their core business, allowing them to adapt to the increasingcompetition, reported vov.vn.
The NCIF also projected 2018 willbe the year that Vietnam’s enterprises are able to integrate further into theregional and world markets. The promotion of corporate equitisation anddevelopment of the private sector this year will promote economic growth in thecoming years, the NCIF said.
In addition to the Small andMedium-sized Enterprise Support Law, which took effect on January 1,enterprises are also expected to focus on developing advanced managementstrategies to enable themselves to do business in the global economy.
A number of large enterprises,such as Samsung and Formosa, are predicted to experience major expansion interms of production and business this year, boosting growth in the processingand manufacturing industry and creating momentum for domestic economicdevelopment.
The NCIF also said successfultrade agreements could provide an opportunity to attract foreign directinvestments into Vietnam, not only in term of new investment but alsoadditional investment in existing projects.
The NCIF forecast highlightedpositive factors in the import and export sectors due to improvements incooperative relations between Vietnam and other countries.
Higher growth rates in Vietnam’skey partners could increase demand for Vietnamese goods, the NCIF said. Pricesof key commodities are also projected to increase, which could expand Vietnam’strade value.
Export levels are also expectedto grow due to a recovery in domestic production. The upward trend in consumerspending is likely to continue this year while inflation is expected to remainunder control, the NCIF said.
However, the NCIF said internaleconomic problems, including unsophisticated technology and the gradualexhaustion of land and natural resources, still pose a major challenge fordomestic economic growth. While there have been developments in productivity,efficiency, and competitiveness, the economy is still in search of a realbreakthrough, the NCIF said.
Vietnam’s labour market this yearcould face numerous challenges from the fourth industrial revolution (4.0Industry), which affects all aspects of the economy and society, especially,the textile and electronics sectors that have used a large number of labour.-VNA
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