Economic Sector

Last updated: Monday, April 22, 2019


Prospect for Strong Economic Growth

Posted: Saturday, March 24, 2018

The latest economic downturn happened in 2009; after 10 years, will it take place again in 2019? This is a concern that Mr Vu Viet Ngoan, Head of Economic Advisory Group of the Prime Minister, raised at the 2018 Economic Scenarios Conference titled “Breakthrough Opportunities for Business Growth” held in Ho Chi Minh City on March 20.

This is the 10th edition of the annual conference organised by the Vietnam Economic Times, with the participation of ministerial officials and economic experts, and members of the Prime Minister's Economic Advisory Group and businesses.

A phrase for 2017

Chairing the discussion panel on breakthrough economic policies, Dr Vu Tien Loc, President of the Vietnam Chamber of Commerce and Industry (VCCI), asked the speakers what phrase they would use to describe Vietnam's economy 2017.

Dr Tran Du Lich, member of the Economic Advisory Group of the Prime Minister, chose "hope for re-direction", because his study on Vietnam’s economy from 2001 to 2015 illustrated that the economic growth in 5 years was worse than last year and will be better from 2017.

"The government has boosted investor's confidence," said Dr Vu Viet Ngoan.

"In 2017, the confidence of domestic investors was very positive and will continue to be strengthened in 2018," Mr Ngoan added.

“Breakthrough” is the phrase that was chosen by Mr Tran Thanh Hai, Deputy Director of Import-Export Department, Ministry of Industry and Trade.

Mr Hai said that 2017 was the year of the breakthrough because both the Government and enterprises changed dramatically. The government set high determination to take effective measures to support businesses. On the business side, 2017 was a year of spectacular achievements, especially in import and export.

Confidence, motivation, hope and redirection, opportunity and breakthrough are the words that Mr Loc repeated as he concluded. How to create a bigger opportunity in 2018 is the question Mr Loc raised for next discussion sections.
Many good opportunities for 2018

Regularly presented at the Vietnam Economic Conference, Dr Tran Du Lich said in the past, the conference focused on how to make Vietnam's economy the 'least bad', while now it is how to make it the best.

Mr Vu Viet Ngoan believed the world economy is moving more actively in 2018. Japan, after two decades of stagnation, has shown signs of growth again in the past two years. In China, many economists previously fretted about the "debt bubble ball", but now it is no longer worrying as China's GDP in 2017 rose over 6.5 per cent.

Mr Ngoan said that Vietnam has many good opportunities, the current account balance is likely to reach surplus, the pressure on the market is not too hard. "This year is more positive than 2017," said Mr Ngoan.

He forecast that inflation in 2018 is likely to increase more than 2017 but is still under control as world price will rise a bit more than that of 2017. The price of oil will be around US$60 per barrel, lower than the previous US$65. Next comes technological factor that will affect the price drop, which also helps keep shale oil prices low. The United States has declared it will no longer accumulate oil as before, but become an oil exporter.

Growth drivers are still emerging economies. Price impact from China has been reduced. Next comes the technology advancement that helps reduce the cost of production. US inflation is forecast at only two per cent while the EU has slow monetary policy and the inflation rate is forecast at two per cent. Japan continues to loosen its policy.

World commodity prices will continue to affect commodity prices in Vietnam, Mr Ngoan reinforced the statement on the ability to control inflation.

Mr Ngoan said that it necessary to pay more attention to the medium term of 2018 and 2019, many forecasts of the world economy will come to the bottom and affect Vietnam. According to the latest crisis cycle of 2009, is there any problem that might happen after ten years? "We must prepare for coming risks," said Mr Ngoan.

Optimistic as we are about 2018, we should be well prepared for whatever risks might happen, VCCI President Vu Tien Loc concurred.


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