Channeling 2017 economic success into 2018 momentum

15:17 | 05/03/2018 Society

(VEN) - Given the high growth recorded in 2017, economists are predicting an even faster pace of growth for 2018.

channeling 2017 economic success into 2018 momentum

Targets accomplished

Nguyen Anh Duong, head of the Central Institute of Economic Management’s Macro-economy Policy Department, said recently all 13 economic targets set for 2017 were realized, including the gross domestic product (GDP), which grew by 6.81 percent compared with the National Assembly’s target of 6.7 percent. The industry and construction sector grew the fastest at 7.85 percent, the agriculture, forestry and fishery sector grew 2.9 percent, and the service sector rose 7.4 percent.

Duong, speaking at a Hanoi workshop in late January dedicated to discussing the economy in 2017 and prospects for 2018, also noted that the consumer price index rose 3.53 percent against the target of four percent. Credit increased by 18.17 percent, while foreign direct investment hit a decade record of US$35.88 billion. Export and import revenues soared to more than US$400 billion, of which export earnings exceeded US$200 billion for the first time.

According to the Ministry of Planning and Investment’s General Statistical Office, Vietnam had almost 127,000 new businesses with total registered capital of VND1,295 trillion in 2017, a 15.2 percent increase in number and a 45.4 percent increase in registered capital compared with the previous year.

Vo Tri Thanh, deputy director of the Central Institute of Economic Management, said the effect of the businesses established in the last two years would start making itself felt this year. Economists also say the Vietnamese investment environment improved last year, gaining recognition in the international business community. The improvement is expected to continue this year, greatly facilitating business and contributing to economic development.

Major challenges

Despite favorable conditions for economic growth, Vietnam will still face major challenges in 2018. According to Le Dinh An, former director of the Ministry of Planning and Investment’s National Center for Socio-economic Information and Forecast, the Vietnamese economy remains vulnerable since productivity is still below the level of other countries in the region and the rest of the world. Business continues to face numerous difficulties due to the low efficiency of the government’s incentive policies and the restructuring of public investment and state-owned enterprises.

Dr Le Dang Doanh, former director of the Central Institute of Economic Management, said that despite the government’s administrative reforms, businesses are even paying more in so-called “unofficial expenses”, greatly affecting their operations and general economic growth.

Vietnam anticipates several breakthroughs this year in terms of its international economic integration, with several free trade agreements (FTAs) reaching final stages of negotiation or scheduled for signing and/or entering into effect. The agreements present Vietnam with significant opportunities to increase exports and attract investment. However, to make the most of the FTAs, Vietnamese businesses must meet various requirements, including the Country of Origin principle.

Improving productivity

Economists say to achieve rapid and sustainable growth in 2018 and beyond, Vietnam needs to continue improving the business environment and increase productivity.

Economist Pham Chi Lan said Vietnam attributed the 2017 economic success to measures adopted by the government designed to reduce operational costs. However, these measures were not evenly implemented, with some ministries and localities failing to take action to help businesses. Lan recommended that ministries and localities make stronger efforts to improve the investment and business environment and facilitate doing business.

Minister of Planning and Investment Nguyen Chi Dung told seminar participants that despite improvements, the Vietnamese investment ambience still lags behind other countries in the region and the world and needs further improvement in the near future.

Moreover, economists say to achieve high and sustainable growth Vietnam needs to pay special attention to productivity since it remains below that of other countries in the region. Low productivity has hindered Vietnam in attracting investment and developing the economy, said Nguyen Van Binh, head of the Central Economic Commission.

Nguyen Hoa