As the country recovers from the Covid-19 outbreak, Vietnamese Prime Minister Pham Minh Chinh is sure that Vietnam's growth would surpass forecasts this year and allow it to continue holding the title of Southeast Asia's fastest-growing economy into the following year.
In contrast to the government's goal of 6%–6.5% and quicker than the median 7.3% pace projected in a Bloomberg survey, he projects that the gross domestic product will increase by 8% in 2022 and by 6.5% the following year.
Given the numerous hurdles and problems the economy is facing in the midst of a deteriorating global outlook, Chinh referred to the 2023 prediction as "realistic" in his prepared statement at the beginning of the National Assembly's fall session. He claimed that a higher base created by this year's GDP performance will make growth more difficult the next year.
The nation's traditional large export markets have "narrowed," while the economy "faces various obstacles, with significant inflationary pressures, dramatic changes in oil prices, and growing material costs," Chinh told lawmakers.
The annual speech by the prime minister, which comes as efforts are made to promote recovery from last year's anti-virus lockdowns, which resulted in factory closures and the disruption of global supply chains, sets the economic course for the coming year. As a result of the removal of limitations, rising domestic demand, and greater exports, the economy has since recovered.
The government "will continue to prioritize limiting inflation while promoting economic growth" for the remainder of 2022 and next year, he said.
With the government attempting to strike a balance between containing inflation, protecting households from the effects of increased living expenses, and preserving the economy's recovery momentum, Vietnam had double-digit growth in the third quarter.
Even after implementing a rare monetary policy tightening with an increase in interest rates last month to combat inflation and support the currency, the central bank is asking commercial banks to find ways to keep lending costs low.
According to Chinh, the government "will handle policies that can aid in the economic recovery but will also be vigilant about the risk of fueling inflation." He continued, "The government would carefully regulate loans to potentially problematic regions while aiming to preserve an adequate money supply for enterprises.
Inflation is predicted by the government to be 4.5% in 2023 as opposed to 4% this year.
In addition, the International Monetary Fund (IMF) recently increased Vietnam's growth prediction from 6% to 7% for this year, the only large upward revision among the major Asian nations. This represents an increase of a full percentage point from three months earlier.
The IMF revised down its forecast for 2023 by 0.5 percentage points to 6.7 percent, although that still stands out against other fading outlooks and would represent the fastest growth among Asia's big countries.
Source: BangkokPost.com, IMF.org