Reinforcing macroeconomic foundations to promote sustainable recovery and development

The Vietnam Socioeconomic Forum 2022 took place on September 18 in Hanoi with the theme of Reinforcing macroeconomic foundations to promote sustainable recovery and development

Reinforcing the macroeconomic foundation to promote sustainable recovery and development was the theme of the Vietnam Socioeconomic Forum 2022 that took place on September 18 under the chair of the National Assembly Chairman Vuong Dinh Hue.

The event attracted the participation of almost 500 experts, businesses, and other representatives.

Vuong Dinh Hue said that since early in the year, variables include growth in many countries slowing down, supply chains and international trade declining, inflation increasing sharply due to the high prices of goods, energy and food, and central banks in many countries raising interest rates.

“The unchangeable is that Vietnam's socioeconomic status continues recovering well with many bright spots,” highlighted Hue.

Specifically, Deputy Minister of Planning and Investment Tran Quoc Phuong said that at the beginning of 2022, difficulties piled up. With high inflation in major economies including the US and Europe, production and consumption supply chains continue to break down.

Fiscal and monetary policies have been adjusted in many economies to curb inflation, which has had a significant impact on economic recovery and growth. Some economies have also shown signs of recession.

In the country, Deputy Minister of the Ministry of Planning and Investment Tran Quoc Phuong said that the economy has seen a positive recovery from the beginning of 2022.

“According to various forecasts, if the striving momentum continues and the favourable context is maintained, GDP growth for the whole year could be higher than the set target, at about 7 per cent,” said Phuong.

“The average consumer price index increased by 2.6 per cent, equivalent to the years 2018-2021, state budget revenue was calculated at 85.6 per cent of the estimate, up 19.4 per cent on-year, and the trade surplus is estimated at almost $4 billion,” he highlighted.

On the basis of Vietnam's relatively good fiscal status, economist Vo Tri Thanh, former deputy director of CIEM, said that while most countries have to halt growth to curb inflation, Vietnam can achieve both goals at the same time.

“In the coming time, despite more challenges, Vietnam can still choose both of these goals,” reaffirmed Thanh.

Prof. Andreas Hauskrecht from the US Indiana University agreed that Vietnam's inflation was under control, especially since core inflation remained low.

“Vietnam should continue to consider macroeconomic stability as the main policy during this period. The Vietnamese dong should not depreciate and interest rates should not be raised,” he recommended.

“By stabilising the macro-economy, we can reach every target that has been set. Macroeconomic stability will also make businesses, banks, and credit institutions strong," concluded National Assembly Chairman Vuong Dinh Hue.

However, he also reiterated that the pressure on macroeconomics remains heavy. Because Vietnam's economy is very open, the total import and export turnover is estimated at $750 billion, doubling the GDP value.

According to many experts, however, the indicators of resilience and adaptation show that the self-resilience of the Vietnamese economy is not very good.

Specific solutions needed for a strong recovery At the forum on Vietnam's economic forecasts, growth scenarios, and prospects for some key economic sectors on May 12, Deputy Minister of Planning and Investment Tran Quoc Phuong said that despite complicated movements in the world's economy, the country is still recovering in the first four months and several sectors are seeing some light.

Standard Chartered Bank forecasts Vietnam’s Q3 GDP growth at 10.8 per cent Standard Chartered Bank forecasts Vietnam’s GDP growth for Q3 and Q4 at 10.8 per cent and 3.9 per cent, respectively, taking full-year growth to 6.7 per cent. High global oil prices may have negative consequences on the economy.

Vietnam's economic growth forecast at 7.5 pc in 2022: World Bank Vietnam’s GDP growth is forecast to expand 7.5 percent in 2022 and 6.7 percent in 2023, with resilient manufacturing and a robust rebound in services serving as the driving forces for economic recovery.