Economic Sector

Last updated: Friday, March 22, 2019


Vietnam Economy 2018: Challenges at Sight

Posted: Tuesday, February 06, 2018

The economic development orientation of the Vietnamese Government in 2018 shows its determination in pursuing the following objectives: stabilising the macroeconomy, controlling inflation, accelerating economic restructuring, improving business environment, and removing barriers to economic development.

The greatest economic achievement that Vietnam gained in 2017 was its high GDP growth rate of 6.81 per cent, highest ever since 2011; Vietnam’s imprint in the international arena was the APEC Economic Leaders’ Week; and the number of enterprises hitting a record high. These have created important impetus for the key economic year of 2018.

According to Mr Nguyen Duc Kien, Vice Chairman of National Assembly Economic Committee, Vietnam’s remarkable economic achievements in 2017 showed that the Government had taken the right steps and given timely instructions. The most outstanding achievements were the accomplishment of 13 socio-economic indicators set by the National Assembly, the export growth reaching US$214.02 billion, with the growth rate of over 21 per cent - an impressive number in the context of the low global trade. The agriculture also contributed significantly to the overall achievements with aquaculture export reaching nearly US$9 billion, the vegetables and fruits export reaching US$1 billion.

Mr Kien also believed that Vietnam’s economy in 2018 would continue a rather high growth rate, staying at 6.5-6.7 per cent on the basis of stable macroeconomy, controlled inflation, ensured balances and protected environment.
According to Dr Luu Bich Ho, Vietnam’s economy is predicted to have a high growth rate. However, there are still numerous of challenges such as the increasing national debt, limited budget while investment plan needs a huge capital source and the economy relies heavily on foreign investment.

Regarding bad debts, Dr Luu Bich Ho said that National Assembly issued Resolution 42 on dealing with bad debts showing the country’s strong determination to resolve this issue. Bad debts from business have now come up with resolutions, making national financial system more transparent. Resolution 42 also clarifies the unclear loans of big debtors – State owned enterprises (SOEs) – regarding their business efficiency, management level, financial reports. Equitisation will be given priority to avoid the loss of the State budget.

In 2018, Vietnam’s economy needs to catch up with the pace of technology area, particularly the 4th Industry Revolution. According to some analyses, this revolution will bring about both huge opportunities for businesses and great challenges for the economy as well. Some inappropriate industries or businesses of low adaptability may be crossed out, for examples, the traditional taxi sector, or some simple labour-used industries.

Dr Can Van Luc, an economic expert, believed that the prospect for Vietnam’s economy in the short-term was positive. However, in the middle and long term, it would depend mainly on policies of the Government and how these policies are exercised. In addition, the coordinating role of such leading players as the State corporations in electricity, power and gasoline would be taken into consideration. The business activities of these corporations reflected the capacity of an enabling government in service of the people in the future.

Anh Phuong

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