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Vietnam's economy has a steady step

09:13 | 22/01/2020

VCN - Vietnam's economy in 2019 had fast and sustainable development, a "repeated" comment of many domestic and international experts when talking about Vietnam's growth rate. We are proud and confident of this in the context of many challenges.

tin nhap 20200122084538 The stable growth of Vietnam's economy
tin nhap 20200122084538 Breakthrough to achieve the targets
tin nhap 20200122084538 Vietnam’s economy expanded by 6.8 percent in 2019
tin nhap 20200122084538

Going up from stability

2020 is a pivotal year that finishing the five-year cycle with an expected GDP growth of 6.84 percent each year (reaching the 6.5-7 percent set by the 2016-2020 plan) and creates momentum for the five-year strategic cycle of socio-economic development 2021-2025 and 10-year strategy 2021-2030 at the same time.

The biggest challenge of Vietnam's economy in 2020 and beyond is to strongly renew the growth model and transform the economic model from width to depth.

In the ’ Continue to innovate to open, maximize, mobilise and use all effective resources, create a new motivation for Vietnam's rapid and sustainable development’, Prime Minister Nguyen Xuan Phuc said:

“We have reached and exceeded the targets in the Resolution of the 12th Party Congress of the Party. Economic growth has always been the top priority of countries in the region and the world, people's living standards and quality of life have been improved, national synergy strength has been increased, and created new positions and integrated more and more deeply. ”

In an additional edition of the Asian Development Outlook 2019 Update, the Asian Development Bank (ADB) reduced Asia’s growth forecast in this year and the following year, of which, the growth of China and India is forecasted to decline because of both domestic and foreign effects. However, for Vietnam, the ADB adjusted the growth rate from 6.8 percent in the previous report to 6.9 percent in 2019, adjusted to increase from 6.7 percent to 6.8 percent growth rate in 2020. According to the ADB, Vietnam has high growth thanks to the improved business environment, the confidence of investors is maintained and foreign direct investment is increased.

For domestic experts, the invested private sector is the main motivation for growth, when taking a large position in export turnover, even; the domestic invested private sector has export growth higher than foreign-invested enterprises (FDI). Economist, PhD. Nguyen Dinh Cung said the investment of the private sector accounts for a high proportion and is continuously increasing, the growth rate of investment is higher than State-owned enterprises and FDI enterprises. This has been a driving force for Vietnam’s investment. According to Cung, these achievements are reached due to the stability of the macro economy of the Government; increase the confidence of domestic and foreign investors and enterprises. Moreover, the Government has promoted administrative procedure reform, improved the business environment to reduce barriers to market entry and reduce costs for businesses, labour productivity is also supported to increase repulsion for macroeconomics.

Step must be steady

In 2019, Vietnam got good news when Vietnam's Global Competitiveness Index (GCI) increased 10 ranks to place no 67 according to the World Economic Forum's ranking. Vietnam had the strongest growth score in the world, located in the Asia-Pacific region with the highest competitiveness in the world, becoming the champion in the race to improve competitiveness rankings. However, looking at other indicators, we still have some limitations such as a low labour productivity index, the number of dissolved enterprises is still high, and the growth rate has not overcome the middle income trap. A report of the National Economics University also shows that, if maintaining the growth rate of 6 percent / year and 7-8 percent / year, Vietnam will have almost no opportunity to catch up with regional economies by 2045.

Economic expert- PhD. Vo Tri Thanh said compared to low-growth countries, Vietnam's growth rate is quite good, but compared to ourselves and overall, it is clearly not good. Inside the economy, disbursement of public investment remains low, State-owned enterprises slowed down, slow equitisation not to mention the slowdown of the global economy also dragged down investment capacity as well as import demand. However, Vietnam's economic prospects are still positive, so the National Assembly has approved the targets for 2020 with growth of 6.8 percent, inflation below 4 percent, and export growth of 7 percent. In addition, the pressure of monetary policy is not high, low inflation will give the banking industry more room to lower interest rates and effectively support the economy.

Obviously, our economy faces new opportunities, but challenges are not small. Therefore, it requires us to have political determination, great effort, and drastic action, especially to accelerate reforms to maximise liberation and use all effective resources, including material and spiritual resources and resources of country and the world to move the country forward.

Deputy Prime Minister Vuong Dinh Hue:

Certainly, Vietnam's economic growth in 2019 is more than 7 percent, the second year increased by 7 percent. Macro economy is stable and strengthened. Inflation is 2.73 percent, the lowest in recent three years when 2018 was 3.54 percent and 2017 was 3.53 percent. Inflation is also much lower than growth, making growth even more meaningful. (Quote from a speech at the Steering Committee of the Price Steering Committee on December 25, 2019)

PhD Nguyen Dinh Cung:

2020 is the last year of the tenure; the Government needs to strongly promote a spirit of reform of 2017 and 2018, even stronger reforms to increase business confidence and excitement, especially of domestic private enterprises. In addition, the restructuring of the State-owned enterprises should also be promoted, in the direction of increasing autonomy. Following the paths that the Party and State have chosen, combined with operating a reasonable market economy, the Vietnamese economy will continue to grow strongly with steady steps, achieving many historical feats, just as how Vietnam's football teams achieved in 2019 to bring victory faith to the whole society.

By Huong Diu/Phuong Thao