The economy of 2022 is still unpredictable, businesses must catch up

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Business Forum 2022: Market identification and adaptation.

Under the direction of the Vietnam Chamber of Commerce and Industry (VCCI), Business Forum Magazine organized the annual program: Business Forum 2022: Market identification and adaptation methods.

In the program, there was also the award ceremony of the 9th edition of the journalism contest about entrepreneurs, businesses and the business environment voted by Business Forum Magazine in collaboration with the Department of Press and Publication under the consensus of the Central Propaganda Department and VCCI.

5 industry groups and 4 “guided” factors

Speaking at the Forum, Nguyen Xuan Quang, Deputy Director in charge of the National Center for Socio-Economic Forecasting (Ministry of Planning and Investment), said that the economic growth scenario could range from about 5.8 - 6.5% in 2022. Therefore, he pointed out five groups of industries that "guide" the Vietnamese economy in 2022.

Those are the industry groups that play a central role and is the "prime capital" to stimulate private investment. Public investment is expected to focus on infrastructure construction, innovation and digital development, thereby helping the demand for building materials to grow in 2022. Next are industry groups with a large proportion of exports such as electronics, textiles, seafood, wood and wood products, rubber, iron and steel; industry groups are stimulated by the recovery of domestic demand; e-commerce and logistics; information technology group.

Nguyen Xuan Quang said that economic recovery is uneven, the prices of goods and services will have strong fluctuations, tending to increase in 2022. Besides, there will be an impact from factors related to large domestic fiscal stimulus packages, loosening credit to support businesses. According to calculations by the National Center for Socio-Economic Forecasting, if fiscal stimulus packages equivalent to 1% of GDP are implemented, there will be about VND37,000 billion to increase GDP growth rate.

Also commenting on the economy in 2022, Dr. Vo Tri Thanh, Director of the Institute for Brand Strategy and Competition, said that there are four factors that affect the economic recovery and growth in 2022. That is how to prevent and adapt to the pandemic. During the Covid-19 pandemic, the factors that keep pace with the recovery momentum of the economies, the support from the state, and the factors that catch up with new development trends have been clearly shaped in the context of Covid-19.

Adapt flexibly and keep pace with trends

Facing the above issues, experts participating in the seminar all said that the business community will continue to face challenges, forcing businesses to go through the digitalization process due to standard methods, produce, provide, interact, work and change, with the impact of the pandemic.

“Businesses, whatever their business, must not forget about risk management - catching up with the recovery momentum - catching up with new trends. Flexible speed is extremely important. The trend in the past 5-7 years in the world, regardless of investment field, is associated with the three words "green - intelligent - humanistic/cultural". This is the trend, the playground, the way to make money, profit and the sense that needs to be focused," Dr. Vo Tri Thanh said.

In addition, Dr. Nguyen Duc Khuong, a member of the Prime Minister's Economic Advisory Group, said that Vietnam can learn from businesses from some of the world's major economies so that businesses can better adapt to challenges.

For example, businesses in Singapore have invested heavily in digitization, including developing digital capabilities for business systems; and supply chain digitization. Furthermore, skills training has been deployed on a large scale by Singaporean businesses to effectively address production disruptions, supply and post-Covid-19 job changes for both businesses and individuals.

In China, businesses are encouraged to take advantage of the "break" of the pandemic to develop and improve the quality of human resources to promote international competitiveness instead of focusing on the goal of rapid growth. At the same time, business development must give priority to environmental, social and governance (ESG) issues to better adapt to the new situation.

But in order to support businesses to develop, experts say that the state also needs a quick and flexible policy response. “There are many support packages that are entangled in administrative procedures, in which, the best policies for businesses to receive are those without administrative procedures such as extending or delaying tax payment time,” said Phan Duc Hieu, Permanent member, Economic member of the National Assembly.

On behalf of the business community, Hoang Quang Phong, Vice President of VCCI, said that businesses expect to soon have a comprehensive economic recovery program scientifically designed, in line with the needs of the business community and conditions of businesses, with high feasibility, as a basis for localities, industries and businesses to develop their recovery plans.

“In the midst of danger, the business community considers difficulties an opportunity and a driving force to improve governance capacity, the ability to respond to market fluctuations, carry out digital transformation, and restructure the workforce towards a sustainable direction," said the Vice Chairman of VCCI.