Viet Nam’s economic growth this year looks bright, thanks to positive economic performance in the first quarter.
The comment was made by Tran Quoc Phuong, director of the Ministry of Planning and Investment’s National Economic Issues Department. However, according to many experts, Viet Nam’s economic growth in the first few months of this year was high but not sustainable due to dependence on foreign direct investment (FDI) as the sector’s exports in the first five months of the year accounted for some 70 per cent of the country’s total export turnover.
“After 30 years of attracting FDI, we cannot deny the role played by FDI enterprises as they already have the value chain and utilise Viet Nam’s advantages to export,” Phuong said.
Measures should be devised to promote links between domestic and FDI firms, thus helping the Vietnamese enterprises join global value chains and access more markets, he suggested. He also said the quality of growth could be measured by looking at the growth index.
From 2011 to date, Viet Nam’s average growth has been more than six per cent per year, a satisfactory growth rate for a developing country, Phuong noted. TFP (aggregate factor productivity) is improving, while labour productivity and per capita income have been fine-tuned at US$2,385 per year, almost double that of 2010 and three times higher than in 2007, he added.
However, despite the promising economic prospects this year, Phuong said the economy still faced many challenges. He also shared his concerns about inflation. Viet Nam’s inflation this year is predicted to suffer pressure due to the complex fluctuation of global oil prices and policies related to salary increase and price adjustment of health and education services, he said.
High inflation will adversely affect Viet Nam’s efforts to ensure macro-economic stability, Phuong said.
A stable macro-economy, strong improvement in policy mechanisms related to institutional reforms, investment climate, administrative reforms and reduction of business costs will continue to effectively support domestic enterprises, thus promoting the development of the private sector. — VNS