What factors affect economic growth in the period of 2021-2025?

	Vietnamese exports to Eurasia enjoy strong growth of approximately 18%
	Import-export approaches US$500 billion, trade surplus reaches US$20 billion
	Central bank extends credit growth limits

Assoc.Prof.Dr.Pham The Anh, Head of Macroeconomics Department, National Economics University, chief economist of the Institute of Economic and Policy Studies (VEPR).

GDP growth target in 2021 set by the Government at 6% is lower than in the previous period. Moreover, level is feasible if done under normal conditions, the domestic pandemic situation is overcome, based on the resources Vietnam has available in the workforce, the commitments that Vietnamparticipates in many free trade agreements (FTAs).In particular, Vietnam has many opportunities when receiving the trend of investment capital flow shifting, production restructuring from developed countries.

The year 2021 is feasible, and the target for the whole period of 2021-2025 will increase by 6.5-7%, according to you is this appropriate?

One of the laws of economics is the law of diminishing marginal productivity.This means a country moves from low income, gradually increasing to high income andthe growth rate will tend to decrease gradually.Therefore, if Vietnam's economy does not see a breakthrough, it outperforms other countries in attracting foreign investment (FDI), institutions, improving the business environment; creatingleadingtechnology productsin the next fiveyears, the growth rate of the next stage will be lower than the previous one.

Reviewing the history of Vietnam's economic growth, we observe that in 1990-2000, the GDP growth rate was 7-8% peryear, the period 2000-2010 increased 6-7% per year,2010-2020, there are years only more than 5% increase, some years increase more than 6%. Other countries too, especially China, in the previous periods GDP growth was more than 10%/year, but now, when the per capita income increased, the growth also dropped to more than 6%/year.

However, the growth of GDP in the next five years will depend on the control of Covid-19 pandemic.Many predictions show that if it is fast, it will not be until the end of 2021 that the pandemic will be completely controlled and by 2022 the world economy can return to normal.

Can you give some assessment and analysis on the impacts on Vietnam's growth momentum in the next fiveyears?

As I said above, achieving the planned growth results depends on what we can do in the next fiveyears.If Vietnam continues the current trend, i.e. production, outsourcing, and employment, the added value created will not be much.While if Vietnam participates more deeply in the value chain, creating more added value for businesses and people in the country, GDP will increase.

Currently, Vietnam's GDP mainly comes from the processing and manufacturing industries for export, but our export-based growth is heavily based on the FDI sector, so if added value iscreated,it will be transferred to foreign businesses.FDI enterprises still consider Vietnam as an attractive market with cheap labour, many investment incentives and incentives that Vietnam has from the FTA.So if this model continues in the next fiveyears, the processing and manufacturing sector will still help create jobs in the best way.

However, when the economy moves to a higher level of income, we will lose the source of cheap labour.Moreover, in the next 10 years or so, Vietnam's labour force will not be as abundant as it is now, because our population structure has entered the aging stage.Therefore, we must focus on and move to service-based development.Currently, this area has had a shift, but due to the impact of the Covid-19 pandemic this year, some industries such as restaurants, hotels, tourism, and aviation have been slowed down and suffered from heavy losses.Therefore, when the economy recovers, the service sector must continue to be transformed because this is an area that creates more added value for domestic enterprises and workers.

Another area that cannot be ignored is agriculture.We have applied high technology to agricultural development, so we have created clean products that meet the standards of the export market, so we have obtained a lot ofcurrency.Although the total export value of the agricultural sector is lower than that of the other sector, most of the value earned belongs to the Vietnamese.

Especially, Vietnam has great prospects and opportunities when taking advantage of signed and effective FTAs.The problem is how to make use of them?Because of many commitments and advantages, foreign enterprises are "flashing" because they are experienced and have technology, so only meeting rules of origin is possible.While many domestic firmsare not ready to participate, they are still afraid.Therefore, domestic enterprises must boldly penetrate the market and take advantage of the FTA so the domestic economic sector will increase, making a great contribution to GDP growth.

Some say we should not focus too much on GDP growth, but aim for sustainable development.What is your view on this?

Of course, in the present context, what we need to be more concerned with is not only the quantity, but alsoquality of growth.We must take measures to associate with sustainable development, improve the business environment, and protect the environment. In parallel with the current short-term policies to minimize the negative impacts of Covid-19,Vietnam should continue and improve on longer-term policies to improve its macroeconomic foundation and mitigate future risks.In all situations, inflation, interest rates and exchange rates need to be maintained in preparation for the post-pandemic recovery period.Diversification of import and export markets also needs more attention to avoid heavy dependence on a number of major economic partners.