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Vietnam's economy: Targets in range

(VLR) The year 2021 is of importance. It is the first year of implementing the 5-year plan of 2021 - 2025 creating momentum for the 10-year strategy of 2021 - 2030... In the context, the Government set targets for 2021: GDP reaches 6.5%; GDP per capita is about USD 3,700. Being one of a few countries that achieved positive growth in 2020. Vietnam has equipped itself a solid foundation to enter the new year of 2021 with new opportunities and new success.

THE ECONOMY POSITIVE BLOOMING BACK

In the start of the year 2021, there were many bright spots in the picture of Vietnam’s economy: the total import-export turnover in the first month of the year estimatedly reached USD 54.1bn- an increase of 45.7% year- over-year- of which 6 products reached the export turnover over of over USD 1bn- accounting for 67.3% of the total export turn over. The industrial product index increased 22.2% year-over-year. The domestic trade increased 6.4% year-over-year. Inflation has been controlled in spite of pressure from consumer demands rising.

Especially, the number of newly-established registered enterprises of over 10,000 has had positive changes- an increase of 21.9% year-over-year compared to 2020 with the newly-registered employees of over 115,000 people- an increase of 37.2%.

It is forecast that the COVID-19 pandemic will keep affecting the economy in both long-term and short term. Vietnam needs to have drastic measures to ensure the completion of the assigned socio- economic development targets.

Nguyen Chi Dung, Minister of the Ministry of Planning and Investment

Outstanding results from disbursement of the State’s budget investment capital plan showed efficiency from the Government’s and the Prime Minister’s management solutions.

According to Nguyen Chi Dung- Minister of the Ministry of Planning and Investment, although there have been bright spots, at the end of January 2021, the pandemic of COVID-19 reappeared in the community with a new variant that is able to spread fast. “It is forecast that the COVID-19 pandemic will keep affecting the economy in both long-term and short term. Vietnam needs to have drastic measures to ensure the completion of the assigned targets", said Dung.

STRIVING TO ACHIEVE THE TARGETS

Right at the beginning of 2021, the Government issued the Resolution 01/NQ-CP on main tasks and solutions to implement the Plan of Socio-Economic Development and State Budget Estimation in 2021, keep implementing ‘the double targets’ effectively: fighting the pandemic and achieving socio-economic developments in the new normal situation.

The Government decided to increase the GDP target of 2021 from 6% to 6.5% on the premise Vietnam passed the year of 2020 when the pandemic raging globally. However, to achieve the target of GDP of 6.5% in 2021, Vietnam has to have good control of the pandemic with application of the COVID-19 vaccine. In addition, Vietnam’s main trade markets as China, the U.S and the E.U should have good control of the pandemic so that Vietnam is able to take good advantages from FTAs Vietnam has signed.

According to calculations from the Ministry of Planning and Investment, if the pandemic of COVID-19 is controlled on time in the first quarter of the year, it is estimated that the GDP of the 1st quarter of 2021 increases 4.46%- 0.66 percentage point compared to the target set in the Decree 01/NQ-CP. Therefore, in order to reach the target of GDP of 6.5%, in the third and the fourth quarter the growth rate should be higher than those set in the Decree 01/NQ-CP.

In the year of 2021, export, consumption and investment would be a three-horse chariot- the main driving force of the economy- as the Government defined. Fields of business with great opportunities of developments will be agriculture, industry and import-export. In addition, there are other markets as finance, securities and real estate. With the current development of the manufacturing industry, Vietnam will be able to join the group of newly emerging industrial countries in the next few years.

With a solid foundation, Vietnam is also expecting contributions from key export sectors as food processing, textiles, footwear, wood processing and product manufacturing from wood, bamboo, and products from paper...

The construction sector will experience fast development with projects of bridges, expressways, rural road that will be constructed, completed and brought into use in 2021.

In addition, it is necessary to implement rational fiscal and monetary expansion policies to stabilize the macro-economy and to stimulate economic growth. Domestic market should be developed in depth, business environment and labor should be improved. Disbursement of the State’s budget investment capital should be promoted for economic growth, together with international cooperation, diversifying import-export market and making good use of the signed FTAs as CPTPP, EVFTA...

Focus on improving institutions, creating favorable conditions for the development of e-trade, electronic payment application; supporting export enterprises to expand market output through cross-border e-trade; promote the fourth technology application to promote chain management, facilitate origin tracing; at the same time, continue to improve and improve the quality of institutions, create an open and favorable business and investment environment.

Overcoming difficulties and challenges with the joint strength and unity, Vietnam is striving to complete the assigned targets and tasks, creating a solid foundation for development strategies in the next 5 years and 10 years.

Hoai Nhan

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