Vietnam GDP growth may reach 7.9-8.1%: experts

With Vietnam bringing inflation under control, its economic expansion can be 7.9-8.1% this year, according to the BIDV Training and Research Institute.

A research team, led by Can Van Luc, chief economist of BIDV bank cum director of the institute, has announced its forecasts based on the country's nine-month economic figures. BIDV is a "Big 4" bank in Vietnam, with the state as majority shareholder.

Vietnam’s economy is likely to expand 8.3-8.5% in a positive scenario if growth drivers continue to recover strongly, public investment projects and the government's recovery program are implemented drastically, and digital transformation is accelerated.

In a negative scenario in which external risks increase and have more negative impacts on Vietnam, the recovery program runs slowly, and growth drivers are not strongly promoted, GDP is forecast to grow at about 7.5-7.8%.

Growth for 2023 is projected to slow down, hitting around 6-6.5%, as the world economy faces a recession.

The average consumer price index (CPI) in 2022 is expected to climb 3.5-3.8% when domestic prices increase slower than the world’s and Vietnam shows good control of inflation.

High global inflation pressure, a possible "stagflation" in some countries, and visible risks to food and energy security will push Vietnam's average CPI in 2023 up to 4-4.5%, before returning to its orbit of around 3.5-4% in 2024, said the team.

They pointed out five groups of risks and challenges facing the national economy in the time to come.

First, external risks and challenges rise with the continued complicated development of the Covid-19 pandemic and the occurrence of monkeypox outbreaks; tight monetary policies applied by counties’ central banks; China’s zero-Covid policy; and a high risk of energy and food crisis. As a result, Vietnam's export markets may shrink while FDI attraction will face difficulties next year.

Second, some packages of the government's 2022-2023 socio-economic development and recovery program have been implemented slowly, especially the 2% interest rate support package worth VND40 trillion ($1.6 billion).

According to the State Bank of Vietnam, by the end of August, total loans with interest rate support hit about VND10.7 trillion ($434.5 million). Only VND13.5 billion ($547,900) in interest rate aid was disbursed, equivalent to nearly 0.04% of the total $1.6 billion.

Third, disbursement of public investment remains slow, reaching VND334.5 trillion ($13.57 billion) in the first nine months, up 19.6% year-on-year, but meeting only 46.7% of the year's plan.

The remaining challenges are increasing risks in terms of interest and exchange rates, cash flow to businesses, and rising bad debts.

In a newly-released report, the World Bank stated that Vietnam should be "ready to consider further tightening of monetary policy" to ensure inflation remains anchored amidst its strong economic recovery and global uncertainties.

The government has put Vietnam’s GDP growth forecast for this year at 8%, higher than its target of 6-6.5%.

The figure is higher than the predictions of some international institutions. On September 27, the World Bank said the country's economic expansion could hit 7.2% this year, the highest in Southeast Asia.