Clothes being produced at Nha Be Garment Joint Stock Company. The garment sector is anticipated to benefit significantly from the Trans-Pacific Partnership. — VNA/VNS Photo An Hieu

HA NOI (Biz Hub) — A brighter outlook is forecast for the Vietnamese economy this year and the following years amid difficulties and challenges, according to economic expert Nguyen Quynh Nga.

Nga, deputy head of the Multilateral Trade Policy Department under the Ministry of Industry and Trade, told participants at a seminar on Viet Nam's Socio Economy in 2015 and Opportunity – Challenges held yesterday in Ha Noi, that the Trans-Pacific Partnership (TPP) was expected to be signed on February 4, 2016, in New Zealand, and added that the relevant Vietnamese agencies were preparing a document for the occasion.

Nga said signing free trade agreements with big partners including the US, Japan, the European Union would help Viet Nam to expand its trade relations with countries and boost exports as well as enhance participating regional value chains and service development.

Viet Nam has renewed its economic mechanism, boosted renovation and improved the business climate with a view to attracting more foreign investors.

In addition, challenges facing the country include the reduction in the State budget from import tax and the pressure on competition from foreign service and goods, even as human resource and high-tech quality remain poor.

Can Van Luc, director of BIDV Training School at the Bank for Investment and Development of Viet Nam (BIDV) said Viet Nam would enjoy much more benefits from the TPP once it become effective after two years. The World Bank predicted that Viet Nam's economic growth may increase a further 10 per cent after it joins the TPP.

Luc said Viet Nam and Cambodia would become the largest beneficiaries after the establishment of the ASEAN Economic Community (AEC) in 2015. The country's GDP would grow a further 3.5 per cent thanks to the AEC and it could increase a further 10 per cent after Viet Nam joins the TPP.

According to Luc, all sectors can benefit from the TPP such as textiles, fisheries, infrastructure, and logistics, apart from real estate, steel and timber products, and drugs. Meanwhile, the sectors facing difficulties are automobile, ports, beef, and sugar, in addition to consumer goods, processed foods, and foodstuff and alcohol.

Concerning the outlook for 2016, Associate Professor Trung Thanh of the National Economic University said world economic growth tended to improve thanks to the developed countries such as the US.

This year, Viet Nam's economy will continue to recover as the world economy bounces back stronger than before in which foreign direct investment (FDI) plays an important role, Thanh said.

Viet Nam will participate in the global value chain and receive numerous opportunities from the free trade agreements so as to increase exports and attract more investment capital.

Thanh predicted that in 2016, monetary policy would be narrowed and the exchange rate can be adjusted.

Prices of some commodities would become higher. The increased pressure on public debt and limited participation of private companies due to their poor finance and abilities would influence the country's economy.

Moreover, Viet Nam lacks a long-term motivation for growth, so it needs to renew its growth model and restructure the economy by focussing on important industries. — VNS