"Acceleration" increases resistance to the economy

	The economy needs a quick response
	COVID-19 epidemic threatens global economy
	Monetary policy supports economy: loosen in prudence

Illustration. Internet

Limitation of resistance

According to a report evaluating the results of restructuring the economy and renewing the growth model for the 2016-2020 period bythe Central Institute for Economic Management and Research (CIEM), Vietnam continues to maintain inflation at less than 4 percent. The speed of public debt and foreign debt decreased significantly. The budget deficit decreased sharply compared to the previous five years and remained stable at less than 4 percent of GDP, reaching the set target. However, the growth rate of money supply and credit outstanding did not decrease much compared to the previous period. The ratio of outstanding loans to GDP and total credit to GDP continued to increase, increasing vulnerability and reducing the resilience of the economy. Therefore, this report assesses that macroeconomic stability continues to be strengthened, the macro economy's resilience has improved compared to the previous period, but vulnerability is still high and resistance is still limited.

Ms. Dang Huyen Linh, Development Strategy Institute, Ministry of Planning and Investment, said that the economy has a higher and higher openness; economic growth, especially in industrial growth, heavily depends on exports and attraction of foreign direct investment (FDI), world economic instability can negatively affect the domestic economy. Moreover, investment growth of the public sector is slowing due to slow disbursement of public investment, affecting the completion of essential infrastructure works. In addition, the unstable macroeconomic balance, low labor productivity and competitiveness of Vietnam are all "bottlenecks" that limit the growth potential as well as the resilience of the economy.

Resilience is limited, but Vietnam is also a country suffering from the Covid-19 epidemic. Many experts predict that the global economy could suffer three to four times more damage than the SARS epidemic in 2003, amounting to US$160 billion. In particular, the report of the Ministry of Planning and Investment provides two scenarios for our country's economic growth in 2020. Firstly, in the case of epidemic control in the first quarter of 2020, our growth is forecast at 6.25 percent, down 0.55 percent compared to the Government's Resolution 01 / NQ-CP. Secondly, if the epidemic is controlled in the second quarter of 2020, our growth is forecasted at 5.96 percent, down 0.84 percentage points compared to the Government's Resolution 01 / NQ-CP and down 0.29 percentage points compared to the epidemic control scenario in the first quarter of 2020.

Facing this situation, Vietnam has quickly implemented many supportive measures with the spirit of "fighting against epidemics like fighting against the enemy", but still strives to make the best efforts to achieve the objectives and tasks of economic development under the resolutions of the Party, National Assembly and Government. Therefore, proposals to cut interest rates, tax rates, business support (DN) as well as promote disbursement of public investment are taken into account. But experts believe that the radical solution must be sustainable for the economy in order to increase resistance in the face of risks and challenges.

Opportunity to change

Obviously, the above issues have been talked about a lot, but the recovery is still delayed, pushing the difficulties that the economy is facing higher. Therefore, experts believe that the current situation of Covid-19 is a risk, but it is a rare opportunity for us to frankly recognize and learn from experience to enhance the shift of structure and policy changes.

One of the "repeated" problems of the economy is the restructuring of production for the economy and for each manufacturing industry. The restructuring of production is not only to restructure crops, livestock, and products but also diversify markets, promote deep processing. This is an effective solution to cope with unexpected developmentsof the international market. Especially, at present, our country's agriculture is heavily dependent on China, most goods are exported in the form of quota, so the risks are high, the border is limited and congestion occurs, even the people of the country must join hands to "rescue". Therefore, in recent years, the authorities have to hurry up the diversification of markets, expand markets as well as finding ways to change production methods with enterprises.

The above issue shows that strengthening and maintaining macroeconomic stability in the long term, increasing resilience and reducing the vulnerability of the economy are always an urgent requirement, thereby moving forward to strongly reform and restructure the economy, changing the growth model. According to Assoc. Prof. Dang Van Thanh, Chairman of the Vietnam Association of Accounting and Auditing, we must clearly analyze the dynamics, the quality of growth, fully assess the current situation and the impact of science and technology on increasing economic growth and labor productivity. We also need to analyze and evaluate the reasons why some economic policies are slow to be guided and implemented and not yet fully developed, such as the equitization policy of state enterprises and small and medium business support, policies to develop and healthy financial markets. It is necessary to plan a long-term strategy and more radical calculations to ensure the sustainable state budget and create long-term resources for the country. "We have to hope the numbers will see the true nature of the economy to get the right and winning solutions for the Vietnamese economy to continue developing and improving in quality," Assoc. Van Thanh said.