HÀ NỘI – The Ministry of Planning and Investment has outlined three scenarios for economic growth next year as part of its preparation for developing a socio-economic plan.

These three scenarios were based on the projection that this year’s growth target of 6.7 per cent is achievable, given the Government’s hastened effort.

Accordingly, gross domestic growth (GDP) was expected to be 6.81 per cent in the best scenario, 6.5 per cent in the medium scenario and 6.4 per cent in the worst scenario.

Trần Quốc Phương, Director of National Economic Issues Department under the ministry, said the scenarios were developed with regard to anticipated results of 2017 and forecasts on global and domestic economic development in 2018 to ensure compliance with the goals of the socio-economic development 2016-20 plan as well as the Prime Minister’s directive for GDP growth at 6.4-6.8 per cent.

The ministry forecast that the mining industry would continue to decline in 2018, which would affect the country’s growth if the economic growth model could not transform from extensive to intensive in a short period of time.

Among the three growth scenarios, the medium one was the most appropriate, the ministry said. The medium scenario also largely met the favour of the Government.

The focus of socio-economic development in 2018 would remain on ensuring a stable macro-economy, curbing inflation and creating stable ground for economic development, the ministry said.

However, achieving 6.7 growth target this year was a challenge.

At the Government’s August meeting, the Prime Minister asked all ministries and sectors to put in their entire effort and determination towards fulfilling the target.

The ministry said internal weaknesses of the economy were also problems, such as labour-intensive growth model, low technology capacity and low competitiveness and efficiency of local firms, while natural resources were gradually getting exhausted.

In addition, remaining room for fiscal and monetary policies to fuel growth was modest.

According to Nguyễn Đình Cung, director of the Central Institute for Economic Management, economic growth largely relied on the development of the businesses. However, the private sector continued to struggle and faced a number of difficulties.

Cung cited statistics according to which just one third of private firms were profitable.

If wages and fees were increased next year, the business efficiency of the private sector would be heavily affected, which would affect overall economic growth, Cung said.

Cung said proposals by the Ministry of Finance to increase several kinds of taxes should be given careful consideration and their impact on consumption and production thoroughly studied.

In addition, economic efficiency of giant State-owned enterprises must be improved. – VNS