For Viet Nam to reach its goals set out in its 2016-2020 plan, robust economic growth will be needed for the next two years, experts have said.
Prime Minister Nguyen Xuan Phuc has predicted that the plan’s goals would be met, but experts have urged the country to tap its potential and maintain its growth rate, which is expected to reach 6.7 per cent this year.
Despite global and local challenges, Viet Nam recorded 7.08 per cent growth last year, the highest figure of the last decade, making the country one of the fastest-growing economies in the world.
This was attributed to the manufacturing sector, which grew by 12.98 per cent, and the agricultural sector, which expanded by 3.76 per cent, compared to 2012.
In addition, import and export turnover last year set a record of US$482 billion, with a trade surplus of $7.2 billion (up 147 per cent compared to 2017).
State budget collections, for the first time, exceeded the target of $3.5 billion for the year.
The tourism sector also showed impressive growth, with 15.5 million foreign tourists last year, a rise of nearly 20 per cent compared to the previous year.
Dr Nguyen Duc Trung, head of the Banking University’s research team that produced the 2019 Viet Nam Macroeconomic Report, said the growth figures were mainly due to a stable macro-economy and a stable inflation rate of below 4 per cent for three years in a row.
“We can see that the business environment has many positive signs,” he said.
The Purchasing Management Index of 56.6 points in November, for example, was the highest among ASEAN-member countries.
In a survey conducted by the General Statistics Office, more than 85 per cent of enterprises said they were upbeat about the economic outlook for the first quarter of this year.
Despite the country’s strong growth, some sectors, such as electronics, construction and telecommunications, had a slower growth rate than in the 2016-2017 period.
The mining industry continued to face losses, while the services sector achieved lower growth than it did in 2017.
Dr Le Xuan Nghia, director of the Institute of Business Research and Development, and a member of the National Monetary and Financial Advisory Group, noted that the average growth rate of 7 per cent per year would become more difficult as the global economy would be unpredictable in 2019 and 2020.
The US-China trade war has also shown an increasing protectionist trend, which will pose challenges for Viet Nam, he said.
In addition, FDI inflows are on a downward trend globally and are shifting to countries with advanced technology resources.
Total registered FDI in Viet Nam last year fell by 15.5 per cent compared to 2017, an alarming sign, Nghia said.
Other problems in Viet Nam include low productivity, slow restructuring of several economic sectors, and underdeveloped supporting industries, he added.
Economic prospects
Based on last year’s economic situation, macroeconomic growth is forecast to grow between 6.8 and 6.9 per cent in 2019, according to the 2019 Viet Nam Macroeconomic Report.
Experts said positive factors for growth could come from the private sector and the recovery of the agriculture-forestry-fishery sector, as well as healthy global economic growth.
In particular, thanks to bilateral and multilateral Free Trade Agreements (FTAs), Viet Nam now has more opportunities to expand its markets, and will continue to be an attractive investment destination.
Nguyen Xuan Thanh, director of development at Fulbright University Viet Nam, said the service sector as well as retail, finance, banking and insurance activities would continue to expand.
The Prime Minister noted recently that inflation and the Consumer Price Index had been kept under control, and said that stringent fiscal policies and an overspending rate kept below 3.6 per cent of national GDP would be important priorities.
Experts discussed the country’s economic prospects for the 2019-2020 period at a meeting held this week in HCM City. — VNS