Two scenarios ahead for Vietnamese economy in 2021

Tran Thi Hong Minh, Head of Central Institute for Economic Management speaks at the seminar

This information was given during a seminar running with the theme of "Vietnam's Economy in 2020 and prospects for 2021: reform, integration, and sustainable development” which was held on January 15 in Hanoi by the Central Institute for Economic Management (CIEM).

In her address, Tran Thi Hong Minh, head of Central Institute for Economic Management said that despite last year witnessing many changes in the national economy as a result of unpredictable developments relating to the novel coronavirus (COVID-19) pandemic, the nation was one of the only countries to enjoy a positive growth rate of 2.91%, while most nations only posted negative growth. This is largely due to Government's direction to implement the dual goal of ensuring pandemic prevention, whilst simultaneously removing difficulties faced in production and business activities.

Throughout the duration of the previous year, the macro-economy remained relatively stable, thereby demonstrating resilience to external shocks, with inflation remaining relatively stable, reaching an average of 2.32%. Although the business sector faced plenty of difficulties due to the direct impact of the pandemic, the startup and innovation ecosystem was gradually perfected, therefore creating a strong start-up wave.

In the year ahead economists anticipate that the national economy will face a number of risks, such as an uneven economic recovery in partner markets, in addition to the trend of monetary easing and devaluation occurring in many other Asian countries amid COVID-19. In addition, importing countries have also increased their trade remedy measures.

Participants also underlined the need to continue focusing on microeconomic reform, whilst also implementing reforms to the economic institutional system to move towards a more creative and friendly environment that is in association with effectively handling risks relating to COVID-19 in the future.

These efforts are inseparable, although they can be viewed as a prerequisite part of the Vietnamese economic recovery plan. It is therefore imperative to continue monitoring the developments of the COVID-19 pandemic as a means of devising appropriate prevention and control measures, while effectively implementing the integration process and ensuring economic development in a sustainable manner.

Economic expert Le Dang Doanh believes that the domestic market should be connected with the foreign market, stating that, “While the world market still faces difficulties and slow growth in exports in major markets such as the United States and the EU, it is very important to exploit the domestic market. Additionally, it is necessary to speed up public investment, fully exploit the private economic sector, and link small and medium-sized enterprises with value chains to boost exports to overseas markets.”