Loading and unloading containers at Cat Lai Port (Ho Chi Minh City). Documentary photo: Hong Dat/VNA
Assessing the current economic situation of Vietnam, Mr. Coppola said that Vietnam's economy has grown strongly in 2022 thanks to three factors: Strong export growth, strong personal consumption, and low base effect. GDP growth rate in 2022 is calculated based on the increase compared to 2021. Since total GDP in 2021 is affected by the COVID-19 epidemic and has a low level, even a small growth in 2022 will lead to high growth rate.
However, in the late 2022 period, Vietnam's economy begins to face many external challenges. Weakening global demand coupled with tight monetary policies in many countries have affected Vietnam's exports. Economic growth in the first quarter of 2023 slowed to 3,3% as a drop in external demand impacted Vietnam's export-oriented manufacturing sector, causing the sector's production to fall by zero. 0,4% in the first quarter.
Mr. Coppola said: “In general, external challenges will create impacts that make Vietnam's economic growth rate only moderate in 2023. The Bank's latest forecasts The world shows that Vietnam's economic growth will reach 6% in 2023, but this outlook still contains many risks.
To solve the current economic difficulties, Vietnam has considered implementing many solutions such as practicing thrift, fighting waste, and reducing value added tax. Assessing these solutions, Mr. Coppola said that reducing the value-added tax rate (VAT) by 2% could help Vietnam promote domestic consumption. However, Vietnam needs to do more to maintain economic growth.
The important role of monetary policy is to support economic activity while keeping inflation under control and regulating exchange rate pressures. The State Bank of Vietnam has cut interest rates several times in 2023 to boost economic growth, but it is still necessary to monitor the impact and pressures of these policies on capital flows and exchange rates. in the following months due to the widening interest rate gap between Vietnam and other countries. Vietnam also needs to closely monitor fluctuations in inflation, Mr. Coppola advised.
In terms of fiscal policy, Vietnam can rebalance public investment projects to promote growth. While strong investment is essential to spur growth and strengthen resilience to economic shocks, public investment in Vietnam has declined in recent years. To promote growth in both the short and long term, more efficient and focused public investment is part of the solution to achieve the goal.
Mr. Coppola also said that exports, investment and consumption are the three pillars determining demand both at home and abroad. The growth of each of these pillars on aggregate demand has a direct impact on Vietnam's economic growth.
For exports, the biggest challenge, he explained, is the influence of external factors such as demand from trading partners in the US and Europe. Personal consumption is a very important pillar and it is a driving force for Vietnam's economic growth in 2022.
However, in Mr. Coppola's opinion, promoting investment will be the key to Vietnam's economic growth this year and the years to come, and help Vietnam realize its ambition to become a high-income economy. high income by 2045 in the context of many challenges related to climate change today.
Vietnam's investment demand is huge. According to the World Bank's Country Development and Climate Report, it is estimated that Vietnam will need to invest an additional 6,8% of GDP each year, between now and 2040, to adapt and reduce the harmful effects of climate change. Climate Change.
Therefore, the World Bank has been supporting Vietnam to achieve its development goals through three main channels. First, lending to meet financial needs; second, supporting research and analysis to help Vietnam identify effective technical and reform solutions to meet development challenges in a rapidly changing world. now; Third, organize and connect events to help Vietnam access international experts as well as the best technologies from other countries to promote knowledge exchange and help Vietnam achieve its economic expectations. economy and development.
