VN"s GDP to grow by 5.5-6%, risk and inflation on the rise

Panellists at the Việt Nam Economic Forum 2022-2023, organised by the Ministry of Planning and Investment (MPI). Photo courtesy of MPI.

Việt Nam's GDP was forecast to grow by 5.5-6 per cent this year, albeit with significant risks and inflation in the range of 4-4.5 per cent in 2022 and likely over 5 per cent in 2023, said economists and policymakers during an economic forum organised by the Ministry of Planning and Investment in Hà Nội yesterday.

The country recorded 5.03 per cent GDP growth during the first quarter of 2022 and a 2.1 per cent rise in CPI. Inflation has largely remained under control with macroeconomic indicators looking stable, according to deputy minister of planning and investment Trần Quốc Phương.

Notably, Việt Nam's Business Environment Index has almost recovered to its pre-pandemic level. The ministry said nearly 50,000 new businesses have been registered since the beginning of the year, the highest number recorded for a single quarter in history.

Economists, however, remained optimistically cautious as the Southeast Asian country was still hard at work controlling the pandemic. Coupled with volatile energy prices and the ongoing Russia-Ukraine conflict, Việt Nam's GDP, in the worst-case scenario was forecast at as low as 4.5 per cent, said Prof. Cấn Văn Lực.

Economic recovery, while showing promising signs, was not rapid across the board, especially in travel, tourism and construction which require further support to get back on track, said Nguyễn Quang Thuân, Chairman of FinnGroup, a service provider of financial data, business information, industry research, credit rating reports and other data-driven analytics services.

Francois Painchaud, Regional Resident Representative for Việt Nam and Laos at International Monetary Fund (IMF), praised the country's efforts in pandemic control and economic recovery but urged policymakers to pay extra attention to inflation, the fallout of international geopolitical conflicts, credit crunch, domestic real-estate market and corporate bonds.

Painchaud called for stronger support for economic recovery, and measures to ensure financial stability and inclusive growth. In the long run, he said the government must focus on implementing reforms in the banking and finance sector, modernising financial policies and improving economic resilience.

In a recent report, the IMF said it expected Việt Nam's economy to grow by 6 per cent this year and 7.2 per cent in 2023 with short-term inflation on the rise. — VNS