Two main drivers of economic growth in the fourth quarter of 2021

VCN - Assoc. Prof. Dr. Pham The Anh believes that there are two main drivers that can improve Vietnam's economic growth in the fourth quarter compared to the third quarter – exports and public investment.
Exports are one of the two main growth drivers of Vietnam in the last months of the year. Photo: Nguyen Thanh.
Exports are one of the two main growth drivers of Vietnam in the last months of the year. Photo: Nguyen Thanh.

Full-year growth could reach 2.5%

Assessing the economic situation in the third quarter and growth forecasts for the whole year of 2021, Assoc. Dr. Pham The Anh, chief economist of the Institute for Economic and Policy Research (VEPR), said that from the GDP figures of the third quarter, it can be seen that the economy is in a very serious decline.

Moreover, Vietnam is under great pressure from FDI enterprises temporarily transferring some orders to third countries, because they cannot meet the domestic production schedule.

This is a temporary move, but it can also be a long-term one if we do not change appropriate anti-pandemic measures, do not guarantee the circulation of goods and domestic production.

Based on what is happening in the economy, VEPR has proposed two growth forecast scenarios for Vietnam from now to the end of the year.

According to the worst-case scenario, the disease is likely to re-emerge in Vietnam. The situation of “open-close” repeated in some places where infections appeared, causing damage to production. Some orders continued to leave Vietnam because the production schedule could not be guaranteed. Labor shortage may occur because workers are still insecure. Rising costs cause many industries to shrink, especially in agriculture.

Accordingly, the level of impact of Covid-19 on the agriculture, forestry and fishery, manufacturing, processing and manufacturing sectors and the service sector will be more severe than the current one. Economic growth for the whole year 2021 is forecast at 1-1.5%.

In the better scenario, in the condition that the whole country can agree on measures to adapt to the pandemic and ensure that the production and circulation of goods are not disrupted. Production and consumption activities recover slowly but surely, economic centers complete vaccination plans in the fourth quarter of 2021. The lockdown situation as in the third quarter will not be repeated. Accordingly, the whole year economic growth is forecast at 2-2.5%.

Two growth drivers

In addition to benefiting from the shift of FDI inflows, Vietnam also benefits from demand-stimulating policies and the recovery of the global economy, including Vietnam's major export partners. The recovery of Vietnam's economy will be very strong if the country does not implement “social distancing" like in the third quarter, Vietnam's manufacturing industries for export will promote growth.

Regarding public investment, disbursement of public investment in the first nine months of the year only reached about 40% of the plan, if the Government focuses on promoting public investment, it will help improve economic growth. However, he noted, the Government needs to focus on national key projects and infrastructure projects because this not only helps the economy’s growth in the short term but also impacts the economy in the long term.

In order to achieve high growth in the last months of the year, Assoc. Prof. Dr. Nguyen Khac Quoc Bao also said that the most urgent and short-term measure is to make trade and people's travel easier to catch the year-end shopping season. Because this is the occasion when the total demand of the economy increases every year, the last quarter of the year is also the quarter with both personal and institutional investment and consumption activities increasing.

In addition, provinces, cities and localities need to implement the contents of Resolution 128 of the Government drastically, consistently, synchronously and flexibly.

By Xuanthao/Quynhlan

Related News

Available foundations and drivers for strong economic growth

Available foundations and drivers for strong economic growth

VCN - Discussing the potential for Vietnam's economic growth in the coming time, Associate Professor, Dr. Tran Hoang Ngan, National Assembly delegate from Ho Chi Minh City said that Vietnam's economy has many driving forces for strong growth from exports, foreign investment and domestic consumption. At the same time, strong financial resources are also an important foundation for development.
Da Nang Customs joins efforts to establish free trade zone proposal

Da Nang Customs joins efforts to establish free trade zone proposal

VCN - The Da Nang Customs Department is actively collaborating with local authorities and agencies to develop a proposal for the Da Nang Free Trade Zone (FTZ), aiming to drive new economic growth for both the city and the wider region.
Perfecting tax policy for goods traded via e-commerce

Perfecting tax policy for goods traded via e-commerce

VCN - In order to ensure the goal of developing e-commerce activities without causing loss of state budget revenue, the Customs authority is actively coordinating with policy advisory units of the Ministry of Finance to research and review regulations on tax exemption for import and export goods transacted via e-commerce.
One law amending seven financial laws: New driving force for economic growth

One law amending seven financial laws: New driving force for economic growth

VCN - Draft 1 of the Law amending 7 laws in the financial sector has been officially submitted and discussed at the 8th session of the 15th National Assembly. According to the Law-making program, the Law will be developed and promulgated following a simplified procedure and will be approved at this session. The simultaneous amendment of many provisions in the laws in the financial sector and their early approval demonstrate the determination and great efforts of the National Assembly, the Government, and the Ministry of Finance in creating a system of open and appropriate policies, promoting investment resources in the economy, thereby promoting economic growth in the new period.

Latest News

Bad debt at banks continues to rise in both amount and ratio

Bad debt at banks continues to rise in both amount and ratio

VCN - After nine months of 2024, bad debt balances at banks continue to rise, potentially posing risks to the banking sector if control measures aren't implemented.
Monetary policy forecast unlikely to loosen further

Monetary policy forecast unlikely to loosen further

It will be difficult for the State Bank of Vietnam (SBV) to further loosen monetary policy due to a rising USD/VNĐ exchange rate pressure, experts said.
Green credit proportion remains low due to lack of specific evaluation criteria

Green credit proportion remains low due to lack of specific evaluation criteria

VCN - According to the State Bank of Vietnam (SBV), as of the end of September 2024, 50 credit institutions had outstanding green credit balances exceeding VND 665 trillion, accounting for over 4.5% of the total outstanding loans in the economy.
Launching virtual assistants to support taxpayers

Launching virtual assistants to support taxpayers

VCN – After completing the research and development of the artificial intelligence product “Virtual assistants to support taxpayers”, on November 21, Hanoi Tax Department was selected by the General Department of Taxation as the pilot unit to support taxpayers.

More News

Banks increase non-interest revenue

Banks increase non-interest revenue

VCN - Slow credit demand and fierce competition have forced banks to seek ways to increase non-interest revenue, especially when there is a lot of support from the digital transformation of the entire banking system.
Monetary policy forecast unlikely to loosen further

Monetary policy forecast unlikely to loosen further

It will be difficult for the State Bank of Vietnam (SBV) to further loosen monetary policy due to a rising USD/VNĐ exchange rate pressure, experts said.
World Bank outlines path for Vietnam to reach high income status

World Bank outlines path for Vietnam to reach high income status

The World Bank (WB) has released a report which explores how Vietnam can upgrade its participation in global value chains to become a high-income country by 2045.
Strictly control public debt and ensure national financial security  2025

Strictly control public debt and ensure national financial security 2025

VCN – In order to achieve goal of strictly managing public debt and maintaining security and safety of the national financial system in 2025, it is necessary to ensure the borrowings and repayments of public debts is within the approved estimate; closely monitor public debt indicators to ensure that they are within the ceiling and warning thresholds approved by the National Assembly.
Revising the title of a draft of 1 Law amending seven finance-related laws

Revising the title of a draft of 1 Law amending seven finance-related laws

VCN - On November 19, 2024, the Standing Committee of the National Assembly (SCNA) discussed amendments and refinements to the draft of a law revising seven existing finance-related laws. Concluding the session, Vice Chairman of the National Assembly Nguyen Duc Hai emphasized the need for the Government to direct the drafting body and relevant agencies to collaborate closely to finalize a persuasive and widely supported report, ensuring the quality of the draft law for the National Assembly's consideration and decision.
Transparency evates the standing of listed companies

Transparency evates the standing of listed companies

VCN - According to the Hanoi Stock Exchange (HNX), the number of companies placed under warning, control, or restricted trading on the listed and registered markets has increased over the past two years compared to 2022.
State-owned securities company trails competitors

State-owned securities company trails competitors

Contrary to the outstanding performances in the banking sector, the securities subsidiaries of major banks have yet to fully leverage their potential, despite numerous inherent advantages.
Strengthening the financial “health” of state-owned enterprises

Strengthening the financial “health” of state-owned enterprises

VCN - The state economy plays a key role in the socio-economic development process, but it is necessary to strengthen the financial health and competitiveness of state-owned enterprises (SOEs).
U.S. Treasury continues to affirm Vietnam does not manipulate currency

U.S. Treasury continues to affirm Vietnam does not manipulate currency

VCN - In its latest report, the U.S. Department of the Treasury has positively assessed Vietnam's monetary policy, reaffirming that Vietnam does not engage in currency manipulation.
Read More

Your care

Latest Most read
Bad debt at banks continues to rise in both amount and ratio

Bad debt at banks continues to rise in both amount and ratio

After nine months of 2024, bad debt balances at banks continue to rise, potentially posing risks to the banking sector if control measures aren't implemented.
Monetary policy forecast unlikely to loosen further

Monetary policy forecast unlikely to loosen further

It will be difficult for the State Bank of Vietnam (SBV) to further loosen monetary policy due to a rising USD/VNĐ exchange rate pressure, experts said.
Green credit proportion remains low due to lack of specific evaluation criteria

Green credit proportion remains low due to lack of specific evaluation criteria

As of the end of September 2024, 50 credit institutions had outstanding green credit balances exceeding VND 665 trillion, accounting for over 4.5% of the total outstanding loans in the economy.
Launching virtual assistants to support taxpayers

Launching virtual assistants to support taxpayers

VCN - According to the Hanoi Tax Department, the department manages 236,000 enterprises and 235,000 business households and over 10 million personal tax codes.
Banks increase non-interest revenue

Banks increase non-interest revenue

VCN - In the first 9 months of 2024, the group of banks leading in profit has focused on increasing the ratio of non-term deposits (CASA) to help reduce operating costs, resulting in positive credit growth.
Mobile Version