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Economic growth story to continue through 2016

Update: November, 26/2015 - 10:25

Viet Nam has seen clear progress this year in many areas like banking sector reforms, capital markets and foreign investment.

Economist Vu Dinh Anh speaks with Vietnam News Agency about this.

Vu Dinh Anh

How do you see Viet Nam's economic performance so far this year?

Viet Nam's economy has recovered steadily after showing recovery signs in all macroeconomic areas since early 2014.

According to the Government's report, in the first nine months of this year the gross domestic product growth rate was 6.5 per cent, meaning the GDP growth for the whole year will surely reach 6.2 per cent and even approach 7 per cent.

In addition, the Government has consistently implemented policies to stabilise the economy and control inflation since 2011.

According to several reviews at recent investment forums, Viet Nam's investment environment has improved and the nation is an attractive destination for foreign investors.

Meanwhile, people's incomes and consumption have increased with a growth of 10 per cent in the value of retail goods and services.

Manufacturing has recovered to cause a depletion of inventories.

This year all economic targets set by the Government will be achieved, and even exceeded in some cases, though the nation still faces many economic challenges.

Viet Nam has opened and integrated further with the world with success in negotiations for the Trans-Pacific Partnership this year.

Next year is expected to be when the TPP deal comes into effect while the ASEAN Economic Community was established on November 22 and officially operates next year. They will have a very positive impact on Viet Nam's socio-economy and offer new opportunities for the development of the economy in the coming years.

How will the national economy develop next year?

After implementing measures to stabilise the economy, Viet Nam has experience in promoting gradual economic growth and sustaining the stability of the economy. These are very important for economic development in the coming time.

Viet Nam will sustain economic growth and achieve GDP growth of 7 per cent this year based on policies, mechanisms and experience in developing the socio-economy.

In addition, with more global integration in the coming time, Viet Nam will see a rise in investment, consumption, and exports and stronger reform of economic institutions.

The free trade agreement between Viet Nam and the European Union (EU) will impact all aspects of Viet Nam's socio-economy.

These are opportunities, but there are still many challenges. The largest challenge is competitiveness at the national and sectoral levels as well as of products and companies.

The Government should also pay attention to issues related to management of public debt in 2016 because of reports that public debts and their repayments are rising. That would somewhat affect the budget and foreign exchange reserves in future.

What factors will continue to stimulate foreign investment in Viet Nam?

We have seen changes in solicitation of foreign investment that give priority to investments that promote economic growth. Since that is the right direction, foreign investment has continued to increase in terms of both registered and disbursed capital though the global and local economies still faced many difficulties.

In addition, foreign investors have assessed Viet Nam's investment environment as improved and it is expected to improve further in future. Therefore, foreign investment in Viet Nam will continue to increase sharply in the coming time.

One more thing is that investors, policy makers and experts have said free trade agreements will open doors for foreign investors coming to Viet Nam.

The State Capital Investment Corporation will sell stakes in several large companies like Vinamilk, FPT and Binh Minh Plastic. What will be the effect of the divestment on the stock market?

The corporation has in the past mainly sold Government stakes in small- and medium-sized business or those that made losses or were not listed on the stock exchange.

But this time the corporation has decided to sell stakes in large enterprises that have important roles in the market.

In the short term, this will improve the local market because the companies are efficient and have made large profits in recent years.

In the medium and long terms, it will make the State determine more clearly its role in the economy as well as its role as an investor in businesses and in various economic sectors. — VNS

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