Vietnamese Prime Minister Pham Minh Chinh is confident Vietnam’s growth will exceed expectations this year and retain the title of Southeast Asia’s fastest-growing economy through next year, as it emerges from the Covid-19 pandemic.
He expects gross domestic product to rise 8% in 2022 -- beating the government’s target of 6%-6.5% and faster than the median 7.3% pace estimated in a Bloomberg survey -- and expand 6.5% in the following year.
In his written speech at the start of the National Assembly’s fall session, Chinh described the 2023 projection as “reasonable” given the many challenges and difficulties facing the economy amid a worsening global outlook. He said the current year's gross domestic product (GDP) performance will also add a layer of difficulty for growth next year by way of a higher base.
The economy “faces many challenges, with high inflationary pressures, sharp fluctuations in oil prices, rising material costs” while the nation’s traditional big exports markets have “narrowed,” Chinh told parliament.
The prime minister’s annual address sets the economic direction for the year ahead and comes amid efforts to support a recovery from last year’s anti-virus lockdowns when factories were shuttered, and global supply chains were crippled. Since then, the economy has rebounded as restrictions ended, domestic demand picked up and exports increased.
For the rest of 2022 and next year, the government “will continue to prioritise restraining inflation while boosting economic growth,” he said.
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Vietnam posted a double-digit growth in the third quarter, with the government striving to balance between curbing inflation, shielding households from the impact of rising costs of living and maintaining the economy’s recovery momentum. The central bank is urging commercial banks to find ways to keep lending costs low, even after it delivered a rare monetary policy tightening with last month’s interest rate hike to curb inflation and stabilise the currency.
The government “will manage policies that can help economic recovery but will also be mindful about the risk of fuelling inflation,” China told the parliament. “The government will aim to maintain sufficient money supply for businesses while strictly controlling loans to potentially risky areas,” he added.
The government sees 2023 inflation at about 4.5%, compared to 4% this year.