VEPR forecasts 6-6.3 percent economic growth in 2021
(VEN) - According to the Vietnam Institute for Economic and Policy Research (VEPR), the Vietnamese economy is projected to grow 6-6.3 percent this year.
Positive signal
Associate Professor Pham The Anh from the VEPR said Vietnam’s economy expanded by 4.48 percent in the first quarter of 2021, higher than the 3.68 percent recorded in the same period last year. On average, the consumer price index (CPI) rose 0.29 percent in the reviewed period, the lowest increase for the first quarter recorded in the last two decades. The agro-forestry-fishery sector grew 3.16 percent, while the industrial and construction sector expanded by 6.3 percent and the services sector by 3.34 percent.
Positive results in the first quarter of 2021 were attributed to the government’s drastic actions to control the pandemic from the early stages, along with the signing of the EU-Vietnam Free Trade Agreement (EVFTA) and the EU-Vietnam Investment Protection Agreement (EVIPA), as well as rapid disbursement and accelerated implementation of key public investment projects, helping maintain a stable macroeconomic environment and control inflation.
Anh said the Vietnamese economy could grow about 6-6.3 percent in 2021 and the country would continue to maintain impressive export growth this year.
BIDV (Joint Stock Commercial Bank for Investment and Development of Vietnam) Chief Economist Can Van Luc said the Biden Administration’s US$1.9 trillion fiscal stimulus package will likely have positive spill-over effects on emerging markets, including Vietnam. However, to achieve the 2021 economic growth target of 6.5-7 percent, greater efforts of the government, ministries and departments are required.
Warnings of inflation
Vietnam is 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 businesses.
Since the beginning of the year, crude oil prices have increased 30 percent, while those of iron, steel and metals have risen 40 percent compared to a year ago. Unless drastic price management measures are implemented, the average CPI could increase 0.4-0.6 percentage points.
The VEPR warned that given the many uncertainties and risks in the global economy, macroeconomic stability, inflation, interest rates and exchange rates need to be maintained in order to prepare for post-pandemic recovery. In addition, greater attention should be paid to diversifying export and import markets to avoid dependence on a few major markets.
Top priority should be devoted to ensuring social security, maintaining macroeconomic stability and boosting support for businesses. The recovery of major economies such as the US and China is expected to benefit Vietnamese exporters, hence importance should be attached to supporting businesses as a growth engine for 2021.
Corporate support policies should be continued with more substantial measures and a greater focus.
| According to the VEPR, Vietnam should pay greater attention to conducting administrative reforms and enhancing the quality of state management, especially in localities, in order to improve the business environment. |
