Don't get too obsessed with growth numbers

	Recalculation for economic growth in the current situation
	Economic growth projected to reach about 7% in 2021
	Focus on forecasting to ensure safety of public debt in 2020

Dr. Le Duy Binh

How will the rebound outbreak of Covid-19 impact Vietnam's economic growth in 2020?

- The Vietnamese economy is already in its current state, heavily influenced by the Covid-19 pandemic. We already see the impact inVietnam's demand for goods and services and in Vietnam's ability to expand. Demand decline will affect the ability of Vietnamese enterprises to maintain or expand production. For more than three months after we got the transmission under control, the economy has had a little bit of a recovery, but unfortunately the pandemic has flared up again. Although the pandemic is mainly in the Central region and some neighbouring localities, the risk of spreading pandemic is still impossible to eliminate.

This rebound outbreak is a direct shock to the tourism industry, for tourism support industries and for localities currently at the heart of the pandemic. It also produces strong aftershocks. There is no denying the risk the spread of the pandemic will narrow the scope for economic growth there.

But we can fully expect a positive scenario that the pandemic will be controlled in the current geographic areas and coordination between anti-pandemic measures in the spirit of zoning, quelling and prevention measures to maintain economic development will be efficient. This will contribute to reducing the damage of this second outbreak to the economy. But regardless of the scenario, controlling the pandemic must still be the first priority because it is the decisive factor for Vietnam's economic growth in the short, medium and long term.

How are the currently implemented social gap measures affecting economic development?

- The measures of pandemic outbreaks will be zoned and handled there to create space for economic development in the unaffected areas. This measure affirms that we still put the highest priority on anti-pandemic and always stay vigilant, observe the situation, and strong measures like the last time can still be applied if absolutely necessary. This policy coordination is based on experiences and evidence from the anti-pandemic campaign in the first months of the year and the experiences of some other countries, not on sentiment. With experience, evidence from reality, and a calmer attitude, we can take a new approach, through closer coordination of epidemiological and economic policies.

With high determination, we need to take drastic measures to control the pandemic, but in adirection not too narrow but with space and space for economic activities of businesses and people. This in itself will contribute to ensuring the livelihoods of people and workers and the existence and development of enterprises, improving the resilience of the economy in the context of unknown timing as to when the pandemic will be controlled globally. This is also how we are working to adapt to a new normal that is often talked about.

How do you comment on the growth motivation from investment in the new context of the economy?

In terms of investment, we can look at public and private investment. Outbreaks will greatly affect private investment decisions by directly affecting beliefs and feelings about short-term business prospects and opportunities. Investors need confidence to make investment decisions, which can be new investment decisions, or expand investment with unfinished investment projects. The entrepreneurial spirit of Vietnamese businesses is very strong. That is reflected in the past three months, when transmission is controlled, the number of newly established enterprises has increased again, corporations and private companies have also returned through start-up projects. The three months before the pandemic broke out again saw the cash flow returning to the stock market. Private investment has always been an important driver, but it also depends a lot on how the pandemic is controlled in the coming period.

Public investment is still a great hope this year. The nature of public investment is government consumption and the source of money for this expenditure has been financed. Outbreaks may affect the speed of disbursement of public investment, the process of handling investment procedures of investors, the implementation capacity of the management boards and contractors. However, ministries, branches and the People's Committees of the provinces and cities are in a position to be active in solving these difficulties. Public investment is very pervasive, firstly from disbursed capital and it will have a direct impact on economic growth during the year. In addition, public investment also has spillover effects in the medium and long term because it creates a premise for the growth of economic sectors in the medium and long term. For example, let us envision the renovation and upgrading of the two runways at Tan Son Nhat and NoiBai airports, if done this year, will have a very positive impact on the tourism industry and traffic in the following years, especially when the pandemic is under control and demand for travel and tourism increase again.

It can be said public investment is the star of hope for the economy this year. The outbreak of the pandemic will increase the determination of the Government, investors, ministries, sectors, localities, project management boards and contractors to speed up the progress of public investment projects. According to the latest data, the disbursed public investment capital has reached 43% of the plan for 2020. This result, although not as expected, has shown a positive movement compared to the previous period.

The Government is determined to achieve positive growth, but there are also some who say that Vietnam's economy will have negative growth due to the negative impact of the Covid-19 pandemic. In your opinion, which direction will Vietnam's growth follow?

- Giving an assumed growth figure at this point is extremely difficult. All the variables and assumptions for making the growth forecast at this point in time can change daily and weekly and the variation of that variable is too large and depends heavily on one unknown number of utmost importance which is the extent of the geographic scope of the Covid-19 transmission spreads. However, we can still fully believe there will be positive growth this year. If the pandemic is soon controlled, we still have more than a quarter to strive and strive and let this positive growth come closer to positive forecasts about the Vietnamese economy in 2020 that some teams recently announced international officials.

However, we should not be too obsessive about GDP growth figures this year. In the current context, other numbers and indicators may play a more important and meaningful role. These are large macroeconomic balancing indicators, showing macroeconomic stability as a foundation for development in 2021 and the following years. These include the unemployment rate, the number of workers directly affected by the pandemic, the average income decline of workers, and the risk of falling back into poverty due to the livelihoods of many people being affected. Positive growth in the current context has been an extremely encouraging result. We need to pay more attention to other numbers and other indicators to really take effective measures to maintain the sustainable development of the economy and create a stable and solid foundation for growth in the next period.