Vietnam making greater efforts towards a year of economic growth

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Vietnam's economy had a year of brave growth which were not only kept stable but also growing.Photo: Nhandan

The highlight of 2020 was that Vietnam achieved and exceeded 10 out of the 12 main targets assigned by the National Assembly, up two targets compared to the estimate, including the targets on the growth rate of total export revenue and on the unemployment rate in urban areas.

This is an encouraging economic result amid the “COVID-19 period” because the pandemic caused dramatic declines on consumption worldwide, pushing production and export activities to stagnation and raising unemployment rate.

In addition, the implementation of four other goals has better performance than the estimates reported to the National Assembly, including the growth rate of gross domestic product (GDP), the average growth rate of consumer price index (CPI), trade surplus, and the percentage of population participating in health insurance.

Basically, the growth quality of the economy has been improved with less dependence on natural resource exploitation, raw exports, and cheap labour while gradually shifting to rely on application of science, technology and innovation, and the processing and manufacturing industry.

It can be said that Vietnam's economy had a year of brave growth in both quantity and quality, which were not only kept stable but also growing, according to Nhandan.

This result has added a highlight to the economic picture of Vietnam in such a difficult year while reinforcing the confidence of the whole society in the Government's policy and governance in the context unpredictable developments of the COVID-19 pandemic.

However, with GDP growth rate of 2.91% in 2020, Vietnam's economy had the lowest growth year in the past ten years and failed to meet the target set for the 2016 – 2020 period.

This is a big challenge in the starting year of the implementation of the 5-year socio-economic development plan in the 2021 - 2025 period and the ten-year strategy in the 2021 – 2030 period.

To continue with another year of brave growth, right from the beginning of 2021, the entire political system has made every effort to drastically restrain the third wave of the COVID-19 pandemic while continuing to promote production and business activities towards the annual growth target of 6.5%.

At the beginning of the year, the Ministry of Finance asked the Government to develop a decree to extend the deadlines for tax payment and land rent for enterprises in the context of prolonged COVID-19 epidemic with an estimated value of about VND115 trillion (USD 5 billion).

Amid the increasingly unpredictable global political and economic situations and difficulties in making forecasts due to the impact of the pandemic, more than ever, “rewards” will be given to the economies which early and flexibly take response activities.

A container ship docks at Cat Lai Port in Ho Chi Minh City. Photo by Shutterstock

Vietnam's gross domestic product (GDP) was estimated to increase 2.91 per cent in 2020 due to the Government's economic management experience over the past years, a safe and healthy macroeconomic environment and stable politics.

In 2021, the economic growth is expected to reach the target of 6 per cent set by the National Assembly, although the world economy is forecasted to continue the slowing trend due to challenges from the COVID-19 pandemic.

Standard Chartered Bank has forecast Vietnam’s economy will grow at 7.8 percent this year with manufacturing driving the revival.

Tim Leelahaphan, an economist at Standard Chartered Bank, said Vietnam’s economy has been reviving since the third quarter last year.

"The recovery is steady. In the last decade Vietnam's economic growth rate was one of the fastest and we [Standard Chartered] expect this trend to [continue]."

Standard Chartered sees foreign investment and the services sector as driving factors for growth in the next few years.

Vietnam is also acknowledged as one of the most attractive destinations for foreign investors following its successful management of the Covid-19 pandemic.

Vietnamese think tanks Central Institute for Economic Management and National Center for Socioeconomic Information and Forecast have estimated GDP growth of 6.46 percent and 6.72 percent.

The government has set a growth target of 6.5 percent.

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