Viet Nam is integrating increasingly with the global economy, having signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) this month and discussing four other free trade agreements, the annual Economic Scenarios Conference heard in HCM City on Monday.

Speaking at the conference, titled “Breakthrough opportunities for business growth”, Ngo Van Tuan, deputy chairman of the Party Central Committee’s Economic Commission, said: “Such efforts will strongly promote Viet Nam’s competitiveness and economic development in the digital era.

“This is a good opportunity for foreign and domestic investors to strengthen their investment and trade relations.”

Deputy Minister of Planning and Investment Nguyen Van Hieu said: “Viet Nam now has a lot of advantages and a great chance for steady development and a prosperous future.”

Vu Viet Ngoan, former chairperson of the National Finance Supervisory Council and head of the Prime Minister’s Economic Advisory Group, said: “The Government has successfully instilled belief in the business community and this spurred economic growth in 2017.”

This year would have both opportunities and challenges, he said.

“The global economy’s growth will depend on emerging markets.

"But the most important task for the Government is to control inflation and keep the economy steady," he said.

“This year I believe the inflation would be slightly higher than in 2017, but there is no worry.”

"Keeping interest rates at 2017 levels is the best choice for the economy," he said.

“Last year the banking sector underwent a restructure and still faces many challenges. Therefore, interest rate spreads must be good for them to pay their debts.

“If it wants to reduce interest rates, the Government should [first] consider if people will continue to put money in the bank or switch to real estate and stocks.

“Liquidity in the banking sector is still low and the interest rate gap between banks is as much as 2 per cent.”

Tran Du Lich, member of the Prime Minister’s Economic Advisory Group, said the Vietnamese economy runs on borrowing: the Government borrows by issuing bonds while enterprises borrow from banks.

“The State Bank of Viet Nam would like to do both things: increasing credit but also controlling inflation. They should be careful.

“Interest rates stood at a good level in 2017. Enterprises should restructure and reduce debts.

“In 2018 the Government should focus on creating a safe, stable and transparent business environment along with timely incentives for enterprises.”

Le Thanh Hai, a senior official in the Ministry of Industry and Trade spoke about Viet Nam’s new opportunities following signing of the CPTPP.

“We have more new and lucrative markets like Canada, Chile and Peru. I think that more nations would like to join in future.”

The CPTPP is a very important foundation for a general free trade agreement for the whole Pacific – Asia region, he said.

“Viet Nam is hoping to sign three more FTAs. After that most of biggest trade players in the world will have FTAs with Viet Nam, and it would mean Viet Nam is fully integrated into the global international economy.”

But he expressed worry about the US’s decision to hike tariffs on steel imports.

“This is a sign of a return to trade protectionism. In the past the US always encouraged trade freedom around the world, but now it has changed its point of view. It will create a trade war and a bad precedent.”

Warrick Cleine, chairman and CEO of KPMG Viet Nam, said: “FTAs only provide opportunities, not a solution. Viet Nam opens its economy, which means greater competition, and the ability of foreign companies to export to Viet Nam increases.

“We also need to make sure that businesses are as healthy and strong as possible to compete with foreign companies in Viet Nam. They need good strategies, good business plans, making goods and services that people actually want.”

It was the 10th year of the Economic Scenarios Conference, which is organised by the Viet Nam Economic Times newspaper.

It attracted the participation of policymakers, senior officials, leading economists and financial experts and executives from 300 enterprises. — VNS