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The 2021 – 2025 socio-economic development plan must be based on a comprehensive review of Vietnam’s performance in realizing the previous five-year plan, as well as on prediction of Vietnam and international economic outlooks.

Vietnam, which has one of the fastest growing economies in Asia backed by robust exports and foreign investment, has this year struggled to maintain growth momentum due to the virus, which has halted business operations.

Vietnam’s Q1 GDP growth of 3.82 percent was the lowest since 2010, with the coronavirus outbreak crippling key industries like tourism, hospitality and aviation. Otherwise, Vietnam’s annual GDP growth exceeded 6.8 percent from 2017-2019, and was among the fastest growing economies in Southeast Asia.

The government said in a statement posted on its website late Monday that it will continue to improve its business environment and infrastructure, expand its export markets, apply advanced technologies and promote the development of the private sector over the next five years.

Therefore, the government has set an annual growth target of 7 percent from 2021-2025 to make up for the Covid-19 induced slowdown.

It noted that the global economic situation continues to be complicated and unpredictable, while the domestic economy faced many difficulties and potential risks, posing many challenges for sustainable development. The Covid-19 pandemic has exacerbated the situation.

Therefore, the target set out for the period of 2021-2025 "was a challenging task," the government said.

The government recently passed a VND62 trillion ($2.6 billion) financial support package for poor people and businesses affected by the Covid-19 pandemic and cut electricity prices. The central bank has also cut its policy rates to prop up economic activities.

Last year, economic expansion was 7.02 percent, the second highest in the last decade after a record 7.08 percent in 2018.

A man works at an assembly line of Vinfast Auto factory in Hai Phong City, northern Vietnam, June 2019. Photo by Reuters

The target remains a challenging task, given growing uncertainties in the global and domestic economies, including the complicated progression of the Covid-19 pandemic, Phuc said in a directive dated April 13 instructing the formulation of the upcoming five-year socio-economic development plan.

PM Phuc suggested the economy would face tremendous difficulties during the 2021 – 2025 period, mainly due to unresolved internal weaknesses of the economy.

Additionally, socio–environmental issues such as aging population, income gap, natural disaster, climate change, and saltwater intrusion are putting pressure on socio-economic development.

The PM stressed priorities for the next socio-economic development plan would include:

(1) Improving the institutions of the socialist-oriented market economy, with a view for rapid and sustainable economic development on basis of macro-economic stability and inflation under control.

(2) Continuing to push for economic restructuring associated with transforming the growth model towards higher productivity, competitiveness and economic resilience; promote a comprehensive digital transformation and the establishment of digital firms with international competitiveness; improve the business environment and help spur economic recovery in the post-pandemic period.

(3) Pushing for development of economic zones and supporting industries, with a view to meeting the need of the basic production inputs of the economy.

(4) Establishing synchronous infrastructure systems in transportation, seaports, energy, IT, urban and agriculture, among others, while continuing to realize the national housing development strategy and national program of modernized farming.

(5) Utilizing efficiently investment resources for economic development; developing new economic models with the application of digital technologies; enhancing efficiency in public debt management and utilization; accelerating construction progress for project of national priority.

(6) Enhancing quality and efficient use of human resources to take advantage of the Fourth Industrial Revolution and contribute to economic modernization and integration.

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