Việt Nam's economy is developing rapidly: expert

July 14, 2022 - 08:53
Dr Trần Thị Hồng Minh, director of the Central Institute for Economic Management (CIEM), Ministry of Planning and Investment, spoke to Vietnam News Agency about the prospects for economic recovery.

CIEM director Trần Thị Hồng Minh

According to the General Statistics Office, in the first six months of the year, Việt Nam's economy showed signs of growth, such as a strong increase in the service industry and a rising number of newly-established enterprises.

In the first six months, Việt Nam's GDP grew by 6.42 per cent on year, with GDP growth in the second quarter at 7.72 per cent on year - the highest level for the past 10 years.

Meanwhile, global economic growth has been forecast to decrease after the COVID-19 pandemic and due to the conflict between Russia and Ukraine.

Dr Trần Thị Hồng Minh, director of the Central Institute for Economic Management (CIEM), Ministry of Planning and Investment, spoke to Vietnam News Agency about the prospects for economic recovery.

Việt Nam's economy has seen an impressive recovery in the first six months with many positive indicators. Which sector had the most impressive growth in the first half of this year?

During the six months, there were many sectors that overcame difficulties caused by COVID-19.

Việt Nam in the first half of this year achieved impressive growth of 17 per cent in exports and 15 per cent in imports compared to the same period last year.

It showed that Vietnamese enterprises had a strong recovery and the Government has introduced policies relating to economic integration via new-generation free trade agreements.

Those agreements have had very positive effects on economic activities in general as well as on import and export activities.

Another point is that the number of newly-established enterprises in the first six months of the year also surged by 14 per cent on year to more than 70,000. The number of businesses returning to the market also increased strongly by 55 per cent to about 40,000.

According to CIEM's survey, 85 per cent of enterprises in the processing and manufacturing sector believed that there would be good trends in their production and business.

What was the role of the Government in the recovery?

The Government has had effective policies in the prevention of COVID-19, as well as policies of opening borders, opening air routes as well as economic recovery, such as Resolution 11 on economic recovery and development programme. With this programme, the businesses can get timely support from the Government in accessing capital and favourable policies to restore and develop production after many waves of the pandemic.

Which sectors still had low growth after the pandemic?

There were still sectors that suffered the impacts of the pandemic in general and also other difficulties of the domestic and world economies.

For example, in the tourism industry, the number of domestic tourists had high growth in the first six months of the year, especially in the last month of the first half.

However, the segment of foreign tourists was still low. The number of foreign tourists in the first six months had a growth rate of 5 per cent. This was due to the pandemic, inflation and different policies in preventing COVID-19 in other countries. The number of foreign tourists is expected to increase in the second half of this year.

What risks does the Vietnamese economy face?

In the last six months of this year, besides the advantages, Việt Nam's economy still faces many risks and challenges. First, Việt Nam still has to spend a lot of time and resources to control the COVID-19 pandemic most effectively.

Secondly, from now until year-end, other diseases such as monkeypox and dengue fever will still create risks to the domestic economy.

Besides that, there are still problems related to inflation. Inflation not only occurred in the first six months of this year, but from 2021, this issue attracted great concern among many governments when commodity prices increase.

Last year, according to an international economic organisation, there were goods having price increases of 60-70 per cent.

In the first six months of 2022, inflation is still present, causing many negative impacts on world economies, for example, France and the US are facing the highest inflation in the past 40 years.

Việt Nam also faces risks because the pandemic has disrupted the supply chain, affecting production and business, and input materials, so the price of raw materials has increased. The conflict between Russia and Ukraine has partly led to rising inflation.

Therefore, one of the Government's goals is to control inflation as much as possible to support businesses and people to overcome difficulties in this period.

Public investment is considered an important factor to promote economic development. However, in the first six months of the year, disbursed public investment capital was very low. What are the solutions for this issue?

Recently, the Government has established six working groups of local ministries and sectors to strengthen supervision and promote public investment.

We believe that to gain efficiency in public investment, it is necessary to strengthen management ability for public investment projects and clarify the responsibilities of the processes in the disbursement of public investment.

In addition, Việt Nam must improve the institutional system supporting public investment, including the public investment law and related laws such as land law and mineral law.

Việt Nam needs a comprehensive solution package to effectively disburse public investment in the future.

How do you forecast the ability to fulfil the economic growth target?

In the context of many fluctuations in the domestic and global economy, Việt Nam needs to restructure the economy. This issue is already present in the Resolution on economic renewal approved by the National Assembly at the end of 2021 and is currently being implemented in localities around the country.

In addition, the Ministry of Planning and Investment has directed CIEM to research a new economic growth model based on taking advantage of Industry 4.0.

In April and June, the ministry submitted two important projects to get approval from the Government: a scheme on linking regions to exploit the potentials of localities; and a circular economy development project.

Those short- and medium-term solutions are expected to help Việt Nam achieve the economic growth target of 6.5 per cent in 2022. VNS