OECD: Vietnam's Growth to Surpass 6% in 2022, 2023

Photo: congthuong.vn

This is the forecast of Mathias Cormann, secretary-general of the Organization for Economic Cooperation and Development (OECD) at the OECD-Vietnam High-Level Economic Forum 2022 taking place on the morning of October 18 in Hanoi.

Entitled "Connecting regions: Fostering partnerships towards resilient supply chains and sustainable development," the forum drew the participation of leading OECD and Vietnamese economists.

The forum focused important issues, in the short and long term, for Vietnam and the Southeast Asia region.

These issues include maintaining macro stability, controlling inflation, improving the resilience of the economy, strengthening the social security system, the business environment, digital transformation, green growth and attracting high-quality FDI.

Speaking at the opening session, Minister of Planning and Investment Nguyen Chi Dung said that Vietnam is making strong recovery steps, after many difficulties due to the Covid-19 pandemic and complex situation in the world.

The Ministry of Planning and Investment has closely coordinated with the OECD in related activities under the framework of the Memorandum of Understanding between Vietnam and the OECD.

The Ministry advised the Prime Minister to issue Directive No. 15/CT-TTg on key tasks and solutions to maintain macroeconomic stability, control inflation, promote growth and ensure balances of the economy in the new situation.

Minister Nguyen Chi Dung expressed his expectation for the contents of this Forum, especially recommendations on economic governance and reform, state-owned enterprise governance and attracting high-quality FDI inflows in the context of green growth and digital transformation.

Minister Nguyen Chi Dung welcomed and appreciated the effective and substantive partnership with the OECD. Photo: congthuong.vn

OECD Secretary-General Mathias Cormann said that Vietnam's remarkable social progress over the past three decades should be acknowledged.

Vietnam was one of the few countries in the world that managed to escape from Covid-related recessions.

Mathias Cormann said that Vietnam's growth will surpass 6% this year and the next because it's been able to avoid pandemic-related recessions.

Vietnam's growth will be boosted by foreign direct investment, as OECD businesses look to Vietnam, helping to diversify supply chains. Therefore, facing the challenges ahead, Vietnam needs to step up reform efforts to ensure sustainable growth.

According to Mathias Cormann, over the past three decades, Vietnam has achieved impressive achievements.

For example, the poverty rate fell from 80% in 1992 to 7% just before the pandemic. Vietnam has so far achieved a high vaccination rate and effective pandemic prevention measures.

“We forecast that with current foundations, Vietnam's growth will surpass 6% this year and next year. This number will be achieved by the flow of foreign direct investment - as businesses globally look to Vietnam to diversify their supply chains. To prepare for that, Vietnam has promoted an open door policy. Vietnam needs to step up reforms to ensure sustainable growth,” forecasted Secretary-General Mathias Corman.

According to OECD Secretary-General Mathias Cormann, in the context of the region and the world having many complex challenges such as inflation, supply chain disruption, food crisis, Vietnam needs to be prepared to respond to future challenges and shocks.

First, Vietnam needs to adapt to an aging population, reforms are needed to ease the pressure on the workforce. Therefore, the pension and welfare system will need to be improved.

Second, Vietnam will benefit from the opening of trade. Therefore, it is necessary to improve and liberalize service markets. Vietnam needs to focus on innovation, digital transformation, science and technology, attracting high-quality foreign direct investment, creating jobs and improving people's lives. However, there will be challenges in terms of gender inequality and the gap between rich and poor that require effective handling. These will be the areas where the OECD can support Vietnam.

Third, Vietnam has made strong commitments at COP-26 to combat climate change. Therefore, the agricultural sector is a spearhead to focus on, which promotes productivity and production costs to adapt to climate change. Therefore, the OECD and Vietnam are aiming to form a framework for environmental regulation, which requires strong compliance.

Photo: congthuong.vn

At the discussion session on macroeconomic prospects, economic experts from the OECD, the Asian Development Bank (ADB), Indonesia assessed that Southeast Asia, including Vietnam, is a region that continues to retain impressive growth after the impact of the Covid-19 pandemic. This is thanks to the flexible adaptation policy and the rapid deployment of the vaccine campaign.

The OECD-Vietnam High-Level Economic Forum ended successfully, strengthening policy discussions between the OECD and Vietnam in areas of mutual interest. The forum also played an important role in determining priorities and directions for cooperation for the OECD SEARP Program during the period when Vietnam took on the co-chair position.

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