The Vietnamese economy could grow by about 6-6.3 per cent in 2021, said chief economist Pham The Anh from the Viet Nam Institute for Economic and Policy Research (VEPR) during a workshop recently held to announce the Viet Nam Quarterly Macro-Economic Report.

A view of HCM City. The Vietnamese economy could grow by 6.3 per cent in 2021. Illustrative image

VEPR’s report said the global economy has shown signs of recovery thanks to the availability of COVID-19 vaccines, but instability remains while growth is uneven among nations and economies.

In the first quarter, Viet Nam’s economic growth hit 4.48 per cent thanks to the Government’s drastic actions to control the pandemic from the early stages, along with the signing of the European Union – Vietnam Free Trade Agreement and the EU-Viet Nam Investment Protection Agreement.

Additionally, disbursement of public investment capital has been stepped up and progress of key public investment projects accelerated while the wave of investment and trade is shifting to Việt Nam, helping maintain a stable macro-economic environment with inflation under control.

However, Anh also warned that Viet Nam was facing challenges in an uncertain economic environment. The resurgence of COVID-19 in many countries resulting in lockdown measures is prolonging the disruption of supply chains this year, weakening the resilience of enterprises. Geo-political conflicts among major powers could also expose Viet Nam to unexpected risks.

Other risks are related to fiscal imbalance, slow and low investment, a vulnerable financial-banking system, and growth’s heavy reliance on the foreign-invested sector.

VEPR suggested that the top priority should be given to social welfare policies, targeting the right people.

The report also proposed that corporate support policies should be continued with more substantial measures and a greater focus.

Anh said Viet Nam should gradually build a fiscal cushion to prevent shocks like COVID-19 or its unexpected developments in coming years.

Source: VNS