International financial institutions such as the World Bank, the Asian Development Bank and the International Monetary Fund have optimistic assessments of the Vietnamese economy saying Vietnam is a country with a strong economy and the best economic growth in the Asia-Pacific region this year.
Government’s flexible policies
According to international economists, the Vietnamese Government has had an admirable policy in response to COVID-19. The economy reopened and the Government implemented several policies to help businesses recover.
Mr. Michael Kokalari, Chief Economist of VinaCapital Investment Fund attributed Vietnam's economic growth last year to exports and foreign investment. Vietnam's share of exports has increased thanks to taking advantage of geopolitical changes. When China maintained its zero-COVID policy and the US increased taxes on Chinese businesses, foreign-invested enterprises moved to Vietnam.
Singapore’s straitstimes.com commented that Vietnam’s economy grew at the fastest pace in Asia this year. The US’s CNN called it the fastest growth rate since 1997 while the UK’s BBC stressed that it was the highest growth posted from 2011-2022.
Russia’s Sputnik news agency said that thanks to this miraculous economic growth, low inflation, booming imports-exports, political stability and brilliant diplomatic successes, Vietnam had emerged as one of the rare spotlights in the gloomy landscape of recession and crisis in the world.
According to the World Trade Organization (WTO), Vietnam has been continuously in the group of 30 countries and territories with the world’s largest import and export value.
While the rankings of ASEAN countries have not increased in the past few years, Vietnam’s ranking has jumped with total import-export value exceeding 700 billion USD last year.
Challenges overcome to maintain growth momentum
Economists believe that Vietnam's economy in 2023 will not be unscathed from global uncertainty, decline in demand, inflation pressure, high exchange rates, slow disbursement of public investment, and an unstable stock market, real estate market, and financial market. They have made several recommendations for Vietnam.
Andrew Jeffries, Country Director of the Asian Development Bank, said: “You have a very dynamic environment. Juts last year, one year ago, no one would predict interest rates higher in Vietnam, the foreign exchange rates changed, so all of these things changed over time. But you have projects with fixed budget approved to be built over that time. The importance is building flexibility for minor changes and contingency payments and things to enable quick adjustment in process to deal with the dynamic environment we all face to it.”
They also suggested the government delegate more power to localities because many legal frameworks are not in alignment with reality.
Ahmed Eiweida, an Economist of the World Bank, said: “I think the central government is very good in setting overall policies, strategies, and directions. But the central ministry should review the feasibility study, delegate this to provincial and local levels and you can monitor also. I think it’s crucial reform point to decentralize more power to the local and provincial levels and you keep your role over monitoring and oversight.”
Vietnam's economy is forecast to continue to grow better than the regional average this year. According to the World Bank, Vietnam's economic growth next year may reach 6.7%, higher than the Government's target of 6.5%. Vietnam can still maintain the growth momentum of exports thanks to its key export products of agricultural products and garments. With strong commitments, Vietnam’s foreign investment attraction is still rated as one of the top in the Asia-Pacific region.