Global recession and big challenges for Vietnam

By Tran Trinh Lam|20/03/2023 14:11

“With the target of 6.5% growth, 4.5% inflation and other targets approved by the National Assembly in 2023, Vietnam would certainly facing huge challenges without flexible management in the future”

Numbers at the beginning of the year

At the Government press conference on February 2, Minister and Chairman of the Government Office Tran Van Son said that right after the Tet holiday, on January 27, 2023, the Prime Minister issued Directive No. 03/CT- TTg and urged ministries, branches and localities to perform key tasks. In general, all branches and localities have actively started working with high determination to achieve the set goals.


Although the first month of the year has 2 holidays, New Year and Lunar New Year, the socio-economic situation has also achieved positive results. Thereby, the macro- economy continues to be stable; major balances are basically secured. State budget revenue reached 11.3% of the estimate; trade surplus of 3.6 billion USD; food security and energy security are ensured; basic labor supply to meet demand; The money market actively adapts to the rapid and strong fluctuations of the international market... Moreover, the COVID-19 pandemic and other diseases continue to be under well controlled, making an important contribution to the recovery and socio-economic development.

However, according to the Government’s assessment, Vietnam still has many difficulties and challenges. The one emerging is that the macroeconomic is not stable in a sustainable way; inflation pressure is still high; the monetary and financial sectors have potential risks, especially corporate bonds; the real estate market still has problems and inadequacies; large markets, traditional markets are narrowed; industrial production index decreased by 8% over the same period (processing and manufacturing decreased by 9.1%); disbursement of public investment and public-private cooperation is still limited; attracting foreign investment faces many difficulties; the implementation of a number of policies of 3 national target programs, the program of socio- economic recovery and development is still slow, many projects are scattered, fragmented, and prolonged...

In the “Global Economic Outlook” report of the World Bank (WB) released on January 10, the world GDP forecast in 2023 is expected to grow at 1.7%, much lower than the 3% rate announced by the WB in 6/2022.

Regarding the growth of Southeast Asian economies in 2023, the WB forecasts that after a strong recovery in 2022, the growth rates in Malaysia, the Philippines and Vietnam will be moderate due to the export growth rate to major markets slowed down.

Accordingly, Vietnam is expected to grow at 6.3%, the Philippines at 5.4%, Malaysia at 4%, and Thailand at 3.6%. For Indonesia, the WB also forecasts an average growth rate of 4.9% in 2 years (2023-2024).

• Regarding the import and export markets of goods in January 2023, the United States is the largest export market of Vietnam with an estimated turnover of 7.6 billion USD. China is Vietnam’s largest import market with an estimated turnover of 8.1 billion USD.

• Merchandise trade balance in January 2023 was estimated to have a trade surplus of USD 3.6 billion. In which, the domestic economic sector has a trade deficit of 1.04 billion USD; the foreign- invested sector (including crude oil) had a trade surplus of $4.64 billion.

(According to the General Statistics Office’s report)

The big challenges

In accord with the Government’s regular meeting on February 2, the socio-economic situation in the upcoming time will have many difficulties, challenges and opportunities, but there are more difficulties and challenges.


At the Vietnam Economic Scenario Forum 2023 with the subject “Optimizing resources, overcoming challenges” organized by the Vietnam Economic Times on the morning of January 11, Mr. Nguyen Duc Hien, Deputy Head of the Central Economic Commission also assessed that beside the achieved results, the forecast of Vietnam’s economic situation in 2023 has opportunities but more challenges ahead.

The dual adverse factors from outside and inside just arise unpredictable, unforeseeable, which can greatly affect the socio-economic situation of our country, Mr. Hien said.

Many international organizations also predict that global growth will slow down in many regions, from 2.2 to 2.5%, and countries are at risk of falling into recession. Those impacts will affect Vietnam economy, from the monetary and financial markets as well as other factors.

Other than that, currently, out of 10 countries accounting for more than 71% of Vietnam’s export turnover, there are 6 countries such as the US, Korea, Japan, the Netherlands, Germany, the UK and Hong Kong, accounting for 58% of Vietnam’s export turnover. These 6 countries and Hong Kong are predicted to have a mild economic downturn in the short term, so some of Vietnam’s textile, footwear, and furniture industries will continue to be affected. .

Moreover, of the 10 countries that account for more than 80% of Vietnam’s import turnover, there are 6 countries such as Japan, Korea, the US, Malaysia, Taiwan (China), and Indonesia accounting for 41.3% of the total import turnover of Vietnam will also be affected by the economic recession in 2023.


Regarding investment, according to Mr. Nguyen Duc Hien, in the 10 largest investors in Vietnam that accounting for about 93% of the total foreign investment in Vietnam, besides China and Thailand, there are relatively positive forecasts in 2023. The remaining partners including Singapore, South Korea, Japan, Taiwan, Hong Kong, and the United States accounting for 72% of total investment capital in Vietnam, are expected to show signs of falling into recession depending on the extent.

“As such, these numbers clearly reflect the effects of the global recession in general as well as on the economies that will affect Vietnam in 2023 and the following years. Therefore, the growth target of 6.5%, inflation 4.5%, and other targets approved by the National Assembly in 2023, without flexible management, will certainly be great challenges for Vietnam”, Nguyen Duc Hien emphasized.


To overcome these difficulties and challenges, at the regular Government meeting on February 2, the Prime Minister requested ministries, branches and localities to closely follow the conclusions and resolutions of the Central Committee, the National Assembly, the National Assembly, the Government, and especially Resolution 01 of the Government and Directive 03 of the Prime Minister, drastically and effectively implements assigned guidelines, policies and tasks, proactively solving arising problems, promoting 3 strategic breakthroughs, focusing on 3 growth drivers: investment, consumption and export.

In particular, we should continue to give priority to maintaining macroeconomic stability, controlling inflation, promoting growth, and ensuring major balances of the economy; continue to closely monitor the situation, proactively, timely and effective policy responses.

Bài liên quan
  • Suy thoái toàn cầu và thách thức đối với Việt Nam
    "Mục tiêu tăng trưởng 6,5%, lạm phát 4,5%, cùng những mục tiêu khác đã được Quốc hội thông qua trong năm 2023. Nếu không có sự điều hành linh hoạt chắc chắn sẽ là những thách thức rất lớn đối với Việt Nam”

(0) Bình luận
Nổi bật Tạp chí Vietnam Logistics Review
Đừng bỏ lỡ
Global recession and big challenges for Vietnam