The Vietnamese government has set a GDP growth target of 6,5% for 2021. Along with this, the government has outlined a key task: "continuing to focus on achieving the 'dual goal' of effectively preventing and controlling the pandemic, protecting public health, and taking advantage of opportunities to restore and develop the socio-economic situation in the new normal."
So, what needs to be done to maximize the potential and advantages, to achieve the highest possible economic growth rate, while maintaining macroeconomic stability and ensuring the set goals are met?
Vietnam and its target of 6,5% GDP growth in 2021.
Commenting on the government's target of 6,5% GDP growth for 2021, Dr. Nguyen Dinh Cung, former Director of the Central Institute for Economic Management Research (CIEM), said: “The target is cautious. In 2021, I expect Vietnam to achieve 7-7,5%, higher than what the government has set. However, what the government has set is also reasonable because the external situation remains complex.”
Mr. Nguyen Van Toan, Vice Chairman of the Vietnam Association of Foreign Investors (VAFIE), stated that the 6,5% growth target for 2021 is "ambitious" given the complex developments of the COVID-19 pandemic, but considering what we achieved in 2020, it is entirely achievable.
Vietnam has a national economic "foundation," which is agriculture and domestic tourism.
"The agricultural sector's ability to adapt well to the pandemic and natural disasters will be a lifeline for the Vietnamese economy in 2021, contributing to strong GDP growth," Mr. Toan said.
In terms of international relations, according to Mr. Toan, we have wise policies that have created resources to accelerate development in 2021, namely the signing of a series of important trade agreements such as the EVFTA, the Regional Comprehensive Economic Partnership (RCEP), and the Free Trade Agreement between Vietnam and the United Kingdom (UKVFTA)...
Notably, the Vice President of the Association of Foreign Investors has high expectations for the shift of investment by major corporations from other countries to Vietnam in 2021. Not only are these large corporations important, but many small and medium-sized investors from developed countries such as Japan, South Korea, and the United States are also crucial. Small FDI projects, taking advantage of the trade agreements Vietnam has signed, will continue to enter Vietnam next year.
"FDI inflows are expected to surge again once the COVID-19 pandemic is brought under control. Through discussions with listed industrial park companies in Vietnam, many companies have indicated that their clients have postponed investment plans in Vietnam this year due to travel restrictions."
According to economist Dr. Nguyen Minh Phong, in the new year, Vietnam needs to continue focusing on effectively implementing the "dual goal" of both preventing and controlling the pandemic and developing the economy and society in the new normal, while maintaining macroeconomic stability, controlling inflation, and ensuring major balances.
Furthermore, it is necessary to strongly promote the restructuring of the economy associated with the innovation of the growth model, improving productivity, quality, efficiency, self-reliance, and competitiveness, especially developing the domestic market strongly… in order to achieve a GDP growth target of approximately 6%, an average GDP per capita of approximately US$3.700, while the average consumer price index (CPI) increase is around 4%. Thus, it can be said that, overall, the Vietnamese economy next year will maintain macroeconomic stability and is on a V-shaped recovery trend.
Dr. Nguyen Van Than – Member of Parliament and Chairman of the Vietnam Association of Small and Medium Enterprises – told Lao Dong newspaper that in 2021, public investment will continue to be a bright spot for economic recovery and growth. Along with strengthening the disbursement of public investment funds in identified projects, additional economic support packages are needed for people and businesses, giving them more motivation to boost production and business.
Economic growth prospects through the "lens" of foreign experts.
Despite the severe impacts of the COVID-19 pandemic, most economic forecasts from international organizations suggest that Vietnam's growth in 2021 will recover to between 6% and 7%. The IMF forecasts a strong economic recovery for Vietnam in 2021, with GDP reaching 6,5% as domestic and international economic activities continue to normalize.
The World Bank considers Vietnam's outlook positive, forecasting growth at 6,8%.
Discussing the economic outlook for Vietnam in the post-COVID-19 period, Dr. Jacques Morisset, Chief Economist of the World Bank in Vietnam, said: “Vietnam is doing and will continue to do very well. Vietnam has a high potential to become one of the fastest-growing economies in the world thanks to the achievements the country has made in recent times.”
Although the current situation still has many uncertainties, I believe that in 2021, Vietnam will accelerate even more strongly. The World Bank expects that, with many positive signs such as significant progress in vaccine research and the gradual return of trade activities, Vietnam can achieve good growth in 2021.”
According to a World Bank representative, Vietnam has seized the opportunities presented by the crisis. For example, despite a significant decline in global trade this year, Vietnam has still achieved impressive export results.
Andrew Jeffries, ADB Country Director for Vietnam, stated that the ADB forecasts Vietnam's economic growth to be 6,3% in 2021.
This forecast is based on four factors: First, external demand has been and will gradually recover in 2021, benefiting an open economy like Vietnam. Vietnam's major trading partners have been gradually adapting to living with the pandemic while awaiting breakthroughs in vaccine research and development. A complete economic shutdown, as seen in the early months of 2020, is unlikely to occur, thus external demand will gradually recover, creating conditions for Vietnam to further increase exports.
In addition, the accelerated disbursement of public investment will continue to have a positive impact on growth in 2021. Furthermore, the restructuring of capital flows and international trade will continue to be stronger in 2021.
To achieve 7% growth in the 2021-2030 period, elevating Vietnam to upper-middle-income status, Andrew Jeffries believes the top priority is improving institutional efficiency. This will have a ripple effect across all sectors, contributing to sustainable growth. Effective institutions will help narrow the development gap and maximize the utilization of resources to address climate change.
(According to Lao Dong Newspaper)