Growth anything but straightforward

While appreciating optimistic GDP growth forecasts, it is also necessary to recognize that the difficulties and challenges are increasing, as the Covid-19 pandemic has not yet ended and there are major changes in the international economic-political landscape, the “Vietnam economic forecast 2022-2023: Growth scenarios and prospects for some key economic sectors” forum, held by the Economy & Forecast Review Magazine on May 12, heard.

The Asian Development Bank (ADB) has forecast that Vietnam’s GDP growth will recover to 6.5 per cent this year and reach 6.7 per cent in 2023. The World Bank (WB) believes growth will reach 5.3 per cent this year and then stabilize at around 6.5 per cent in subsequent years. The International Monetary Fund (IMF), meanwhile, has lowered its forecast for global economic growth in 2022 to 3.6 per cent, but thinks that Vietnam’s economic recovery will come from the implementation of the Socio-Economic Development and Recovery Program, which will help it grow 6 per cent this year and 7.2 per cent in 2023.

While some industries will post good growth rates, approaching pre-pandemic levels, others will find this problematic. Aviation and tourism are slowly recovering, while real estate is facing major challenges caused by legal policies and short-term credit measures. “One sector’s disadvantage will lead to issues in others, for example construction, construction materials, and banking,” said Mr. Nguyen Quang Thuan, CEO of FiinGroup.

Dr. Can Van Luc, a Member of the National Financial and Monetary Policy Advisory Council, believes that in the context of increasing inflationary pressure and slowing growth in many countries, the concern for Vietnam is “stagflation”.

He predicted two scenarios for Vietnam’s GDP growth based on the current international situation and the implementation of various socio-economic programs. Under the basic scenario, GDP will grow 5.5-6 per cent in the 2022-2023 period, but may fall to 4.5-5 per cent under the more pessimistic scenario.