Vietnam's economic growth targets deemed feasible

09:00 | 29/05/2019 Economy- Society

(VEN) - In 2018, Vietnam achieved significant results in economic development, paving the way for further successes in 2019. However, the way ahead is not easy.

Growth drivers

At the Vietnam Economic Conference 2019 that took place recently in Ho Chi Minh City, economists and managers shared the opinion that 2018 was a successful year for the Vietnamese economy with various record results. Economic growth was maintained; the macroeconomic situation was stable; inflation was well controlled; and major balances were ensured, creating new impetus for development in 2019.

Regarding the driving force of economic growth in 2019, Associate Professor, Dr. Hoang Van Cuong, member of the National Assembly Committee for Financial and Budgetary Affairs, said the potential of supply and demand in the Vietnamese economy is great. This, he explained, is because Vietnam has a large domestic goods market that has grown on a stable basis over years, while the demand in the global market tends to increase, enabling Vietnam to maintain existing export markets and seek new ones.

Vietnam has taken long steps on the international integration path. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) officially took effect in Vietnam on January 14, 2019, affirming Vietnam’s new position in the international arena and creating favorable conditions for domestic and foreign companies to increase cooperation and promote trade, contributing to sustainable growth of the economy.

Deputy Minister of Planning and Investment Nguyen Van Hieu said, “Free trade agreements (FTAs) will help Vietnam attract investment, increase trade linkages, seek new export markets and improve labor productivity, thus enhancing the internal strength of the economy.”

A representative of the Hongkong and Shanghai Banking Corporation Limited (HSBC) agreed with this view, saying the risks of macroeconomic instability may slow down global economic growth but create a lever for economic growth in ASEAN, including Vietnam.

Along with implementing breakthrough strategies and restructuring the economy, the government is furthering its efforts to improve the business and investment environment. Specifically, it has slashed administrative procedures; simplified business conditions and procedures related to specialized inspection of import, export goods; reduced business costs, especially capital costs, BOT costs, and administrative charges related to the implementation of business support policies, especially those applied to the private sector. All these efforts are important drivers of economic growth in 2019.

Ensuring growth quality

Associate Professor, Dr. Nguyen Duc Thanh, Director of the Vietnam Institute for Economic and Policy Research (VEPR) believes the targets set by the National Assembly for 2019 can be achieved or even exceeded. To make the most of its advantages to become an “Asian Tiger”, Vietnam has been striving to participate in the Fourth Industrial Revolution. Promoting institutional reform and improving the business environment and the quality of domestic workers are major tasks.

In 2019 and ensuing years, Vietnam will concentrate on six measures to promote rapid and sustainable economic growth. The government has been committed to accelerating economic restructuring and improving legal institutions and state management capacity in order to maintain an annual economic growth rate of seven percent or higher. It has targeted breakthroughs in improving the business environment and enhancing national competitiveness, looking towards transparency and equality in access to resources, and reducing business costs.

The government will give greater priority to investment in science and technology, research and development, as well as infrastructure development, especially smart and digital infrastructure, to enable Vietnam to grasp opportunities from the Fourth Industrial Revolution. At the same time, the government will take suitable measures to harmonize socioeconomic development and environmental protection, along with climate change adaptation efforts, and to promote equal development of different regions.

Vietnam is implementing the National Single Window (NSW) and ASEAN Single Window (ASW) mechanisms. These measures are designed to make the most of opportunities from new-generation trade agreements in order to boost the flow of goods and services between markets, especially those in ASEAN, along with improving institutions, standardizing the cost and time required to implement customs procedures, and developing the ASEAN self-certification of origin mechanism.

Deputy Minister Nguyen Van Hieu said that although Vietnam has achieved successful results in attracting foreign direct investment (FDI), the local content of products manufactured in Vietnam remains low and even tends to decrease. Vietnam is renovating its FDI attraction orientation, while at the same time improving its management capacity and human resources to ensure its effective participation in free trade areas.

The government is also taking strong measures to support private companies and promote the development of small and medium enterprises so that they can contribute to promoting the rapid and sustainable growth of the Vietnamese economy.

Hoang Chau