Vietnam's economic growth could reach 7 percent in 2021-25
Vietnam’s economic growth is forecast to reach 7 per cent in the 2021-25 period thanks to the country’s participation in new-generation free trade agreements.
During the period, inflation will stand at a moderate rate of 3.5-4.5 per cent year. Labour productivity will be improved with an annual growth rate of about 6.3 per cent.
The information was released during a seminar held in Hanoi on Thursday, themed “Vietnam economy perspective for 2021-25: opportunities and challenges from new generation free trade agreements”.
It was organised by the National Centre for Socio-Economic Information and Forecast (NCIF) under the Ministry of Planning and Investment.
According to NCIF’s Director Tran Thi Hôong Minh, the signing and implementation of new generation free trade agreements, especially the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Vietnam-EU Free Trade Agreement (EVFTA) would put a profound and wide impact on Vietnam's economy in the period of 2021-25.
“Both CPTPP and EVFTA have wider range of commitment compared to other trade pacts, as they cover import and export terms while setting production methods for goods exchanges,” Minh said.
“They have positive influence on economic growth, especially in markets of the signatories.”
EVFTA and CPTPP, respectively, can boost Vietnam's GDP up by 4.3 per cent and 1.3 per cent by 2030, Minh said, adding that Vietnam's export turnover to the EU by 2030 is expected to surge 44.4 per cent while that to CPTPP member countries will rise by 14.3 per cent by 2035 .
“The trade deals will exert influence on the Vietnamese economy in mid-and long-terms as they put pressure on the Government to improve institutions and business climate,” she said.
In another scenario, Vietnam’s GDP could expand 7.5 per cent if the country can take advantage of the Fourth Industrial Revolution, improve quality of investment and well develop the modern economy, Minh said.
Meanwhile, Tran Toan Thang, an official from the NCIF, said the EVFTA and CPTPP’s commitments were higher than WTO in terms of investment openness, investment protection and dispute settlement, and they helped Vietnam promote exports as well as improve supply chains.
Although Vietnam could improve its competitive capacity in terms of market scale and labour productivity, it could take time for the country to better infrastructure and promote innovation and technology readiness, Thang said.
The country should work more to renew its growth model, accelerate key drivers of economic growth, and make good use of opportunities from global integration, science-technology development and the Fourth Industrial Revolution, Thang said.
Also on Thursday, the Vietnam Chamber of Commerce and Industry (VCCI) co-operated with Alibaba Group and OSB Investment and Technology JSC to hold the seminar “Vietnam exports on the eve of the EVFTA and digital transformation trends”.
VCCI Deputy Chairman Doan Duy Khuong said EVFTA created motivation for the development of Vietnam’s economy in general and exporting enterprises in particular.
After the trade deal takes effect, the EU will eliminate about 85.6 per cent of import tariffs on Vietnamese goods, equivalent to 70.3 per cent of Vietnam’s revenue from exports to the EU.
The trend of switching from traditional businesses to digital platforms was becoming increasingly popular and was considered a useful solution to help businesses expand export markets, in the context of Vietnam’s deeper integration into the global economy, Khuong said.
The seminar provided attendees with useful information about EVFTA, digital transformation trends as well as the importance of e-commerce application in seeking commodity sources for global importers.
It also provides effective marketing and promotion methods on e-commerce site Alibaba.com.
Bernard Dewamme from Belgium-based Mentally Fit Global Group shared useful information to help Vietnamese exporters enhance their leadership capacity, improving the competitiveness of Vietnamese businesses.
A slowdown in export growth of the foreign-invested sector could have a negative impact on Vietnam’s economy in 2020, according to SSI Securities Corporation, Vietnam’s largest brokerage house.
The medium-term outlook for the Vietnamese economy is broadly positive despite persistent downside risks, the World Bank (WB) said in its East Asia and Pacific Economic Update released on October 10.
While Vietnam’s economic growth is expected to ease to 6.7% in 2019, it is set to outperform the rest of Southeast Asia and remain the fastest growing economy in the region.