Vietnam’s GDP projected to grow 7 percent in 2018
Updated : Thursday, May 24, 2018 1:21 PM (GMT+0700)

Vietnam’seconomy could grow by 7.02 percent in 2018 under a high growth rate scenario,according to the National Center for Socio-Economic Information and Forecast(NCIF).

 
Vietnam’s economy could grow by 7.02 percent in 2018 - Illustrative image - Source: VNA

The NCIF predicted twoeconomic development scenarios for Vietnam’s economy this year, including abasic scenario marked by a medium growth rate and a high economic growth ratescenario.

According to the NCIF, thebasic scenario is more likely to occur. Under this scenario, investment in thepublic sector would help maintain a steady growth rate, playing an importantrole in regulating the economy.

This economic model couldsee more restructure, but the capital and exports are expected to remain thebackbone of economic development. The financial system is projected to maintainits stability, while financial and monetary management are expected to becomeflexible.

Domestic economic growththis year could reach 6.83 percent under this scenario, while inflation isprojected to remain low at about 4.5 percent.

The NCIF forecasts a higherGDP growth rate under the high economic growth rate scenario if the economy cansustain the results expected in the basic scenario in addition to governmentefforts in economic reform and governance aimed at removing bottlenecks inseveral sectors of the economy, including land policy, credit andadministration.

These efforts are expectedto create a favorable business environment for the development of the businesscommunity. Under this scenario, the economy could grow by 7.02 percent in 2018,with average inflation at 4.8 percent.

The NCIF said nationaleconomic growth in 2018 is expected to sustain its upward trend, as globaleconomic development could have positive effects on domestic economic activity.Government efforts to remove economic roadblocks put in place in 2017 areexpected to have more impact in 2018.

Newly signed free tradeagreements are projected to bring breakthroughs in investment as well as theexpansion of export markets. Localities and ministries have also initiatedefforts to improve the business investment environment. These are expected toboost domestic economic development by the end of the year.

Regarding the development ofspecific sectors, the centre said production and business activities ofenterprises are also likely to improve. Despite facing many difficulties in2017, Vietnamese enterprises have more opportunities to develop in 2018, withtheir focus on their core business, allowing them to adapt to the increasingcompetition, reported vov.vn.

The NCIF also projected 2018will be the year that Vietnam’s enterprises are able to integrate further intothe regional and world markets. The promotion of corporate equitisation anddevelopment of the private sector this year will promote economic growth in thecoming years, the NCIF said.

In addition to the Small andMedium-sized Enterprise Support Law, which took effect on January 1,enterprises are also expected to focus on developing advanced managementstrategies to enable themselves to do business in the global economy.

A number of largeenterprises, such as Samsung and Formosa, are predicted to experience majorexpansion in terms of production and business this year, boosting growth in theprocessing and manufacturing industry and creating momentum for domesticeconomic development.

The NCIF also saidsuccessful trade agreements could provide an opportunity to attract foreigndirect investments into Vietnam, not only in term of new investment but alsoadditional investment in existing projects.

The NCIF forecasthighlighted positive factors in the import and export sectors due toimprovements in cooperative relations between Vietnam and other countries.

Higher growth rates inVietnam’s key partners could increase demand for Vietnamese goods, the NCIFsaid. Prices of key commodities are also projected to increase, which couldexpand Vietnam’s trade value.

Export levels are alsoexpected to grow due to a recovery in domestic production. The upward trend inconsumer spending is likely to continue this year while inflation is expectedto remain under control, the NCIF said.

However, the NCIF saidinternal economic problems, including unsophisticated technology and thegradual exhaustion of land and natural resources, still pose a major challengefor domestic economic growth. While there have been developments inproductivity, efficiency, and competitiveness, the economy is still in searchof a real breakthrough, the NCIF said.

Vietnam’s labour market thisyear could face numerous challenges from the fourth industrial revolution (4.0Industry), which affects all aspects of the economy and society, especially,the textile and electronics sectors that have used a large number of labour.

Source:VNA

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