Viet Nam economy set to bounce back in 2021: Forum

Viet Nam is well-positioned to revive its economy this year due to a boost in private investment and exports, experts told a forum in HCM City on Monday.

 

Nguyen Xuan Thanh, a member of the Prime Minister’s Economic Advisory Group, told the Vietnam Economic Scenario Forum that the economy would be driven this year by the domestic market, boost in private investment and exports to the EU and ASEAN.

The world would continue to see trade tensions and uncertainties caused by the outbreak, but Viet Nam had already prepared various scenarios for economic growth, he said.

Despite the outbreak, the economy has continued to post strong growth, which is set to rise to 6.8 per cent this year, according to the Asian Development Bank (ADB).

“The country should continue to stabilise its economy, maintain low interest rates, boost infrastructure investment, and step up negotiations with major trading partners to sustain growth as the country continues to restrict international travel due to the pandemic.”

Chu Van Lam, editor-in-chief of the Vietnam Economic Times magazine, said since the pandemic remained a global threat, the country had mapped out a socio-economic development strategy for 2021-25.

Last year Viet Nam’s role, position and brand name were significantly strengthened globally due to its success in containing the virus as well as achieving positive economic growth, he said.

“Viet Nam is the only economy in Southeast Asia and one of 10 countries in the world to achieve growth.”

Viet Nam aims to become a developing country with modern industry by 2025, a developing nation with modern industry and upper middle income by 2030 and a developed country with high income by 2045.

Tran Hong Quang, director of the Ministry of Planning and Investment-run Viet Nam Institute for Development Strategies, said GDP growth was projected at 7 per cent a year for the next decade, which would take per capita income to US$4,700-5,000 by 2025 and $7,500 by 2030.

The country would need to continue to boost key economic sectors and restructure State-owned enterprises, he said.

Pham Thanh Ha, director of the State Bank of Viet Nam’s monetary policy department, said the central bank would ensure the stability of the monetary market and operation of credit institutions and promote non-cash payments and the digital economy.

Dang Hoang Hai Anh, an economist with the World Bank in the US, said Viet Nam would need to carry out further institutional reforms and improve its investment and business environment to attract investors.

Andy Ho, CEO of VinaCapital, said Viet Nam’s successful containment of the pandemic, positive economic growth and ratification of recent FTAs had reassured investors.

“All these factors have helped make the country a highly recommended alternative for relocation in Southeast Asia.”

EVFTA

One of the most significant events in trade in 2020 was the EU- Viet Nam free trade agreement (EVFTA).

It came into effect on August 1 last year, paving the way for increased trade between the EU and Viet Nam by eliminating almost 99 per cent of customs duties between them.

For Viet Nam, the tariff elimination will benefit key export sectors, including smartphones and other electronic products, textiles, footwear, and agriculture.

Bui Kim Thuy, member of the Harvard Advisory Council for Asia and the Pacific, noted Viet Nam had signed 16 FTAs with partners, the second highest in ASEAN behind Singapore.

Hundreds of officials from ministries, the State Bank of Viet Nam, World Bank, investment funds, and nearly 300 local and foreign companies participated in the annual forum.

Titled ‘Shaping Investment Strategy and Economic Business in a New Context’, the event was organised by the Vietnam Economic Times magazine along with the Viet Nam Institute for Development Strategies.

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