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Vietnam may miss 2023 GDP growth target

The Saigon Times

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HCMC – Vietnam’s economic growth in 2023 is likely to peak at 6%, thus missing the 6.5% target, even if the nation manages to mobilize resources and meet up to 95% of the public investment disbursement goal for the year.

This outlook was a focal point of discussion among economists at the Vietnam Socio-economic Forum 2023, held in Hanoi on September 19.

Can Van Luc, chief economist at the Bank for Investment and Development of Vietnam (BIDV), highlighted both external and internal challenges facing Vietnam’s economy. He emphasized ongoing risks from the international context, as well as difficulties in international trade activities.

In the first eight months of the year, Vietnam’s agriculture, forestry, and fisheries sectors played key roles in ensuring national food security and maintaining their status as traditional export items. While the service sector experienced growth, albeit at a slower pace, the industrial and construction sectors encountered challenges.

Luc presented three economic scenarios for 2023, all of which predict GDP growth below the National Assembly-approved target of 6.5%. In the most pessimistic scenario, with a deeper global downturn and limited growth opportunities, GDP growth could plummet to 4.5%.

Conversely, in a more optimistic scenario with a rapid global economic recovery and digital transformation serving as primary growth drivers, GDP could grow 5.5-6%.

Looking ahead to 2024 and 2025, Luc forecasts GDP growth rates of around 6% and 6.5%, respectively, assuming a gradual global economic recovery and controlled inflation.

Nguyen Xuan Thanh, a lecturer at Fulbright Vietnam University and a member of the prime minister’s economic advisory team, also offered insights, suggesting that achieving average GDP growth of 6.5% between 2021-2025 would be challenging without significant economic restructuring.

He predicted a GDP growth rate between 5.5-5.9% for the current year, depending on the realization of 95% of the 2023 public investment disbursement plan.

Both experts stressed the importance of transitioning to a green economy, emphasizing the need for future policies and public investments to prioritize sustainable, green, and circular economic principles.

Alexander Bohmer, head of the Southeast Asia Division at the Organization for Economic Cooperation and Development (OECD), reported that the OECD has revised Vietnam’s growth forecast for this year to 4.9%, with an expected increase to 5.9% in 2024.

The Ministry of Planning and Investment had previously reported a 3.72% economic growth rate in the first half of the year, the lowest in 12 years. To achieve the 6.5% GDP growth target for the year, the economy would need to grow by around 9% in the remaining quarters.

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