Vietnam's economy may lead ASEAN's growth this year

29/09/2023    189

Reputable organizations in the world forecast GDP growth in 2023 of Vietnam can be ranked first compared to other countries in the Southeast Asian region (ASEAN).

The economy faces many "adverse winds"

The Board of Executive Directors of the International Monetary Fund (IMF) has just released the latest forecasts on the Vietnamese economy. Accordingly, the strong recovery of Vietnam's economy in 2022 has stalled due to "adverse winds" at the end of last year and the first half of this year. The IMF predicts that the driving force for economic growth in 2023 will come from recovering exports and loosening policies (especially fiscal policy). Inflation is expected to remain controlled below the target level of 4,5%. Vietnam can return to high growth in the medium term with the support of structural reforms.

The Executive Directors unanimously applauded many Vietnamese authorities for acting quickly to maintain economic stability when facing many difficulties both at home and abroad. However, risks are still increasing and further efforts are needed to protect macro-financial stability and promote deepening reform. From there, we will address vulnerable factors and ensure green, strong and inclusive growth in the medium term.

In addition, because the room to loosen monetary policy is limited, fiscal policy needs to play a key role in supporting economic activity if necessary. The IMF recommends strengthening the fiscal framework, budgeting processes and increasing revenue over the medium term to support ambitious socio-economic development plans.

The IMF applauded the authorities for effectively controlling inflation risks, but emphasized that monetary policy needs to continue to be cautious in a complex context and limited policy space. At the same time, we appreciate flexible exchange rates and encourage continued progress in this area along with modernization of the monetary policy framework.

GDP growth will remain optimistic

Realizing that 2023 will have many challenges for the Vietnamese economy, experts from the Asian Development Bank (ADB) have also forecast that Vietnam's GDP growth will reach 5,8%, slightly down compared to the previous year. in April 4.2023. However, ADB believes that Vietnam's GDP growth rate in 2023 is still at the top compared to other countries in the Southeast Asia region. By 2024, with economic growth forecast at 6%, Vietnam's GDP growth will rank second in Southeast Asia, only behind the Philippines (2%). Inflation forecasts are also reduced, possibly at 6,2% in 3,8 and 2023% in 4.

In the most recent report, the investment fund from Finland - Pyn Elite Fund identified Vietnam as one of the fastest growing economies in Asia. The Fund expects Vietnam's economic growth rate to continue at 5-7% annually in the near future. The annual profit growth of listed companies will remain at 12 - 25%...

Regarding the exchange rate, ADB's chief economist - Mr. Nguyen Ba Hung assessed that the State Bank is operating flexibly, expanding the amplitude, exchange rate fluctuations are within the pre-set range. Therefore, the State Bank has not encountered any policy difficulties with exchange rates. In the context of relatively stable prices and weak demand, policy coordination can help the economy recover effectively. In the short term, it is necessary to implement supportive monetary policy and expansionary fiscal policy.

"Slow credit growth shows that monetary policy easing must be closely coordinated with fiscal policy implementation to promote economic activity effectively" - ADB chief economist - Mr. Nguyen Ba Hung assessed.