|Wooden furniture processing at a factory in Vietnam. Economists say the global economic situation has had an impact on the Vietnamese economy
The National Assembly (NA) Office and the NA Economic Commission co-held the “Vietnam SocioEconomic Forum 2018: Current Situation and Prospects” in Ho Chi Minh City on September 18 and 19.
The forum was aimed at providing vital inputs for NA deputies to prepare for the sixth sitting of the law-making body next month to examine the execution of the NA resolution on socioeconomic development for 2018, according to Le Bo Linh, vice general secretary and deputy head of the NA Office.
He noted that short- and long-term factors at home and abroad have impacted the adoption of the resolution’s measures. Therefore, it is necessary to identify the challenges and prospects of executing the socioeconomic objectives to present key solutions for the remainder of the year.
Global economic uncertainty has had an impact on the Vietnamese economy, said Tran Toan Thang, director of the Department of World Economic Issues at the National Center for SocioEconomic Information and Forecast (NCIF) under the Ministry of Planning and Investment.
Thang pointed out that prices tend to rise alongside global commodity price rises. Meanwhile, imports and exports are likely to decline due to the effects of the trade war between the US and China, US protectionism and exchange rate fluctuations.
He added that US tax reform could affect investments from US. businesses in Vietnam. American investors might return to the United States to take advantage of the reduced prices and heavily invest in the technology sector.
Having taken these scenarios into account, he suggested Vietnam’s economic development policies should aim to enhance its technological capacity, thereby attracting foreign direct investment (FDI) in advanced technologies, countering the effects of U.S. protectionist measures, curbing inflation and actively managing exchange rate volatility.
Nguyen Duc Anh, head of the Analysis and Forecast Division at NCIF, said Vietnam enjoyed strong economic growth in the first eight months despite the signs of losing momentum.
Anh noted that the improvement in growth quality had yet to meet the targets. The national economy is growing, supported by its capital. Besides this, the processing and manufacturing industries are heavily reliant on the FDI sector and the activities of small segments in their value chains.
He further commented that the improvement in the business environment had not produced any noticeable effects yet, while foreign debts and loan repayment obligations were approaching the ceiling of safe limits.
Furthermore, inflation and exchange rates are still under control but are under great pressure. Hence, prudent monetary policies are needed to curb inflation, especially due to demand, according to the NCIF official.
Dr Tran Du Lich, a member of the prime minister’s economic advisory group, claimed four macroeconomic targets – GDP growth, price stability, job creation and trade surplus – for 2018 were still guaranteed. However, the economy should have a fresh impetus to grow further in the coming years.
Therefore, according to Lich, the Government should prioritize the execution of policies aimed at enhancing the efficiency of resource usage and the quality of economic growth.
Moreover, the transformation of the industry from outsourcing to direct manufacturing should be aligned with support for small and medium-sized enterprises to join value chains. This should be regarded as the strategic vision of national industrialization.
Lich said the role of major economic regions should be improved, while the public administration, including administrative institutions, the apparatus and the country’s manpower, should be further reformed to remove bottlenecks and mobilize resources.