Vietnam's economic growth to recover from Q4: Economist

Illustrative image (Source: VNA)

The Vietnamese economy is likely to gradually recover from the fourth quarter of 2021 and escape the minus growth seen in the third quarter thanks to the activeness of the business community and the Government’s efforts to remove obstacles facing enterprises, held economist Nguyen Bich Lam who is former Director General of the General Statistics Office.

Talking to the Vietnam News Agency, Lam noted that the fourth resurgence of COVID-19 in several northern industrial hubs such as Bac Ninh and Bac Giang, and later in southern localities including Ho Chi Minh City, Binh Duong and Dong Nai, as well as the capital city of Hanoi in the third quarter has caused numerous difficulties to the business sector which generates 60 percent of the country’s GDP.

The fourth pandemic wave has exhausted the business community in many aspects, he commented, citing a survey conducted by the General Statistics Office in September which showed that 95 percent of enterprises said that they faced difficulties due to COVID-19.

Meanwhile, 80 percent of businesses involving in the survey said that they saw rises in input cost, 54.2 percent pointed to increases in material prices, 49.5 percent complained about higher logistics cost, 33 percent encountered a worker shortage, and 40.8 percent faced a lack of materials for production, he noted.

Nguyen Bich Lam, former Director General of the General Statistics Office (Photo: VNA)

He, however, underlined that despite a reduction of 6.17 percent in GDP of Vietnam in the third quarter of this year due to COVID-19 impacts, the Asian Development Bank (ADB) and other financial institutions still remain optimistic about the Vietnamese economic prospects in the medium and long term.

Lam held that the optimism is based on the recovery of domestic demand, coupled with the strong consumption power of the nearly 100-million strong market, the country’s stable macro-economic situation and the dynamism of the economy.

Moreover, Vietnam is also a member of many large-scale multilateral and bilateral trade agreements, said the economist.

At the same time, the Government has rolled out measures to speed up the disbursement of public investment capital, thus improving the capacity of the economy and the infrastructure system.

Investors have shown confidence in the Vietnamese investment environment, which can be seen in a rise in foreign direct investment (FDI) inflows into Vietnam despite a drop of 30 percent in FDI flows around the globe, said Lam.

Lam highlighted the Government and localities’ efforts to accompany the business community in difficult times.

On September 9, the Prime Minister issued Resolution No. 105/NQ-CP on support for enterprises, cooperatives and business households hit by COVID-19, aiming to help them recover and develop production in a safe manner amid the pandemic, he noted.

The expert held that the resolution is a great help in removing difficulties facing enterprises.

He added that the Government’s drastic directions in speeding up the disbursement of public investment capital have contributed to making up for the slow growth of the business sector. However, due to the short remaining time of the year, it would be hard to complete the public investment disbursement plan for 2021, he stated.

Regarding the economic outlook in the fourth quarter, Lam predicted an expansion of 2-3 percent, resulting in 1.6-2.1 percent GDP growth for the whole year./.