Improved business environment, infrastructure can help Vietnam’s growth reach 6.5%: IMF

Improvements to the business environment and infrastructure can help Vietnam secure economic growth of 6.5% over the medium term, said Krishna Srinivasan, director of the International Monetary Fund's (IMF) Asia and Pacific department.

Krishna Srinivasan made the statement at the IMF’s press briefing on the Regional Economic Outlook for Asia and Pacific on Thursday. The executive also noted that over the medium term, the IMF expects growth at about 6.5% in Vietnam, and “there are opportunities from digitalization and green transition”.

He stressed that the business environment in Vietnam is not fully supportive, while pointing out the country is receiving considerable foreign direct investment (FDI) given its high growth potential.

Srinivasan highlighted that the growth in 2024, also a rebound from a challenging 2023, “will be both driven by relatively strong external demand and a supportive policy stance”.

“Policy support should be more favorable and that should, along with external demand, help raise growth to 6%,” he clarified, adding that “there's an issue about policy mix, whether you could get more support from the fiscal and rely less on monetary.”

In the April 2024 edition of its World Economic Outlook report, the IMF projected Vietnam's GDP will grow 5.8% in 2024, 6.5% in 2025, and 6.5% in 2029.

Besides, Vietnam has been removed from the Low-Income Developing Countries (LIDCs) group and added to the Emerging Market and Middle-Income Economies (EMMIEs) group by the IMF.

Among the EMMIEs in Asia, Vietnam’s figure for 2024 is one of the highest, only lower than the 6% for Cambodia, 6.8% for India, 6.5% for Mongolia, 12.4% for Palau, and 6.2% for the Philippines.

The IMF projected Vietnam’s inflation at 3.6% in 2024 and 3.4% in 2025.