Vietnam faces macro-management challenges

(SGI) - Although 2022 has been an unusual year for the global economy, Vietnam's economy has still seen reasonable growth and stability. 
Illustrative photo.
Illustrative photo.

This does not mean that macro management will be not prove to be a challenge in the coming year. Dr. VŨ TIẾN LỘC, a member of the Economic Committee of the National Assembly, shared his many views with Saigon Investment in a recent talk.

JOURNALIST: - Sir, what is your comment on the overall picture of Vietnam's economy in 2022?

Dr. VŨ TIẾN LỘC: - After two years of stagnation during the Covid-19 pandemic, Vietnam's economy in 2022 has made a strong rise. Most of the economic sectors have made great breakthroughs. As a result, GDP in the third quarter recorded a growth rate of 13.67%, a record in the past decade. Many domestic and foreign economic research organizations and experts have assessed that the GDP growth target of 6% to 6.5% set by the National Assembly and the Government at the beginning of the year is completely feasible. The strong breakthrough of Vietnam's economy is due to the Government's flexible support policies.

Although the Covid-19 pandemic has been controlled and the economy fully reopened since the beginning of the year, the world has seen many unpredictable fluctuations, such as the Russia-Ukraine conflict, and rising inflation. Consumption demand has plummeted, and the supply chain has been disrupted. All of these factors have directly affected the Vietnamese economy. Therefore, with GDP growth in 2022, it can be seen that the government's economic management policies were reasonable.

Among the most important were three synchronously performed tasks. The first was the economic management task under the responsibility of the Government. Second was that the Government has made efforts in promoting the resolution of outstanding problems in the past. For instance, for projects languishing for many years, the Government came up with several solutions to revive these projects which were factors contributing to the growth of the economy. The Government also solved problems related to the legal system, such as drastically amending and perfecting the Land Law. Third task which was relatively successful was to deal with emerging problems, such as the complicated Covid-19 pandemic, the emergence of new strains of diseases, unexpected geopolitical tensions, and the disruption of the global supply chain.

I think that the three tasks the Government has implemented in 2022 will prove to be the success formulas for the following years. The GDP growth figure of 13.67% in the third quarter was once considered significant, but it is also necessary to recognize the fact that this growth is partly due to the low starting point last year. The third quarter of 2021 was the period when the Covid-19 pandemic spread the strongest. At that time, Vietnam's GDP recorded negative growth, down to 6.17%. Therefore, this growth is only local in nature. On the other hand, because the third quarter of 2022 recorded growth, this will put great pressure on economic development in the third quarter of next year.

- Sir, what is your opinion about the challenges that Vietnam's economy may face in 2023?

- Changes in the world will still pose a challenge for Vietnam's economy in 2023. In the general context, the forecast of economic research organizations is less optimistic. The global economy in 2023 is likely to continue to decline. In particular, inflation will be the biggest challenge which will slow down the growth rate of the global economy and reduce the demand for consumption in many countries, including those countries that are strategic trade partners with Vietnam.

Vietnam's economy is heavily dependent on exports. In case the world aggregate demand for consumption decreases, the import-export industry will certainly suffer. People in countries importing key Vietnamese goods such as the US, the European Union and Japan will tend to limit consumption. When demand decreases, these countries will limit the import of goods, thus reducing exports, which will affect the GDP and production capacity. This will then have a direct effect on the employment of hundreds of thousands of Vietnamese workers.

Therefore, maintaining the import-export growth rate in 2023 as in previous years is a very difficult task. The two spearheads of Vietnam's economic structure, which are import and export and Foreign Direct Investment (FDI) are bound to face many challenges in 2023.

- Sir, under which scenario will the macroeconomic picture in 2023 emerge?

- I think there will be two scenarios for economic growth in 2023. In the event that the world economy still is in the current situation and there is no further negative trend, it is possible that Vietnam's economy may still maintain the same growth rate as in 2022, which is fluctuating between 6% to 7%. But if it moves in the opposite direction and the world continues to face negative factors, then Vietnam's economic growth rate will be below the expected threshold.

I believe that despite facing many challenges and difficulties, Vietnam's economy will still maintain its growth rate. How much growth depends on us and on how the Government operates is to be seen. The world still considers Vietnam as one of the bright spots for investment. Besides, Vietnam also has many attractive policies to attract foreign capital flow and our country's politics is also stable at present, while labor is abundant and cheap. The fact still remains that investors are continuing to choose Vietnam for lucrative projects which is a very positive thing.

- Thank you very much.

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