Vietnam's GDP growth could reach 6.76 per cent in 2021-2023

Vietnam's GDP growth could be 6.76 per cent in 2021-2023

At an April 22 Workshop on "Making economic recovery and institutional reforms intertwined after COVID-19: Way forward for Vietnam" held by the Central Institute for Economic Management (CIEM) with the support of Aus4Reform and the Australian Embassy to Vietnam, Tran Thi Hong Minh, CIEM director general highlighted that even as the world is rocked by the pandemic, Vietnam remains keen on its goals.

Thus, the country continues to pursue breakthrough targets to stabilise the economy, manage inflation, and improve economic resilience. There have been great strides ahead in international economic integration by signing the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) or the EU-Vietnam Free Trade Agreement and Investment Protection Agreement (EVFTA, EVIPA) in 2019. However, there are some obstacles in reforming and managing policies, and implementation.

"While it is one of the very few countries successfully fighting COVID-19, which provides a strong foundation for recovering and strengthening local production, re-opening in safety, Vietnam should build a long-term plan to mitigate risks and find new growth drivers," said Minh.

She emphasised that if breakthroughs in institutional reform succeed, along with proper fiscal and monetary easing measures, annual GDP growth could reach 6.76 per cent every year in 2021-2023 and productivity could improve significantly. The Vietnamese economy is expected to recover at a quick pace and more sustainably, even while the world's economy is fluctuating strongly.

The CIEM has outlined three scenarios for economic growth, based on Vietnam's management of the pandemic this year. Under the first scenario (normality), the CIEM forecasts that the Vietnamese economy will grow 5.98 per cent with 3.51 per cent inflation. Economic growth will rise to 6.45 and 6.61 per cent in 2022 and 2023.

Under the second scenario (fiscal and monetary easing), growth will reach 6.43 per cent in 2021 with 3.78 per cent of inflation. The growth is expected to be 6.8 and 6.83 per cent in the next years.

Under the third scenario (fiscal and monetary easing, along with institutional reform), Vietnam's economy will grow by 6.47 per cent in 2021 and 3.56 per cent in inflation, reaching 6.88 and 6.92 per cent in subsequent years.