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Tuesday, July 16, 2024

Economic growth seen below target – report

The Saigon Times

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HCMC – Economists at the Central Institute for Economic Management (CIEM) have predicted that Vietnam’s gross domestic product (GDP) growth for 2023 may fall short of the target of 6.5% set by the National Assembly.

During a seminar, titled “Vietnam’s economic performance in the first half and prospects for the second half of 2023,” held yesterday, CIEM and the German Agency for International Cooperation presented three economic growth scenarios.

In the first scenario, assuming that global economic conditions develop as projected by international institutions and that Vietnam keeps the same policies as those in 2021 and 2022, GDP growth for 2023 would reach 5.34%. This projection includes a 5.64% decrease in exports, a 3.43% increase in the consumer price index (CPI), and a trade surplus of US$9.1 billion.

The second scenario considers the same global economic factors as the first scenario, but with Vietnam further easing monetary and fiscal policies. Under this scenario, the projected GDP growth for 2023 is 5.72%, with a 3.66% decline in exports, a 3.87% increase in the CPI, and a trade surplus of US$10.3 billion.

The third scenario envisions a more favorable global economic context, characterized by improved growth recovery, reduced supply chain disruptions, lower inflation in the U.S., and effective reforms and management in Vietnam. In this scenario, the projected GDP growth for 2023 is 6.46%. Exports are expected to decline by 2.17%, the CPI is projected to expand by 4.39%, and the trade surplus is estimated at US$6.8 billion.

The report also analyzes factors that may influence Vietnam’s economic prospects in late 2023, including monetary tightening in major economies, intense strategic competition, shifting capital inflows due to the global corporate tax, progress in the Economic-Social Recovery and Development Program, and Vietnam’s digital and green transformations.

During the seminar, Tran Thi Hong Minh, director of CIEM, highlighted various global economic developments in the first half of 2023. Vietnam will have to pursue economic growth while maintaining macroeconomic stability and social welfare, with a focus on promoting sustainable economic development, she noted.

Bui Quang Tuan, director of the Vietnam Institute of Economics at the Vietnam Academy of Social Sciences, cautioned about the rapidly changing conditions and the importance of considering factors such as retail potential, domestic consumption, digital economy, and requests for special mechanisms from different regions in the country.

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