Vietnam could expect a GDP growth rate of 6.76 percent this year, according to the National Center for Socio-Economic Information and Forecast (NCIF) under the Ministry of Planning and Investment.
How much the Vietnamese economy could pull ahead, however, would largely depend on the global economy, said Dr. Dang Duc Anh, deputy director of the NCIF.
In a favorable scenario, the global economy would experience growth. The country could also hold inflation down, keep the forex rate under control, and implement sound socio-economic development policies. Here, Vietnam’s GDP could grow at over 7 percent.
In a more conservative estimate, ongoing trade tensions, rising protectionism, and natural disasters would have a much more significant impact than expected. And, if these adverse developments wallop critical sectors as agriculture exports and animal husbandry, the economy could grow at 6.76 percent.
While economic experts had not reached a consensus with their forecast for 2020, most had argued the global economy was likely to slow down.
“Flaring tensions from political and economic issues around the world is hurting the price of commodities, especially the US-China trade war. On top of that, rising trade protectionism in many markets hinders trade and damages the global value chain,” said Anh.
However, Vietnam is in an excellent position to pursue high GDP growth this year thanks to stable macroeconomics, many international trade deals, rising contributions from the private sector, and a growing appetite in the domestic market for goods and services.
Key challenges and limitations for Vietnam include its processing and manufacturing sector, traditionally a significant driver of the economy. The industry is facing a limited supply of skilled workers, underwhelming growth among the country’s small-medium enterprises.
Further, several essential products have been negatively affected by the ongoing US-China trade war, or become targets of higher tariffs in overseas markets.
Anh urged the Vietnamese government to focus on providing support to key business sectors. These include areas where Vietnam enjoys competitive advantages or those that could support other economic industries such as tourism, information technology, software manufacturing, and agriculture. Vietnamese products must also enter new markets to minimize the negative impacts of potential geopolitical conflicts.
Goods loaded at a seaport in Da Nang. Efforts to keep inflation down and the forex rate in check will play a key role in boosting GDP growth in 2020, experts say. Picture credit: VNA Photo
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