Economic prospects for 2013

Despite the difficulties caused by 2012’s global economic slowdown, Vietnam recorded an encouraging economic growth rate of 5.03 percent.

Alternative scenarios

The Ministry of Planning and Investment(MoIT) has outlined three scenarios for the national economy in 2013 based on the forecasted fluctuations of the local and global markets. The three scenarios assume 2013’s GDP growth rate will hit 5, 5.67, and 6.34 percent..

The second scenario - a GDP growth rate of 5.67 percent and an export growth rate of 14.6 percent - has been judged the most probable

Economists are cautiously optimistic about the international economy, noting the Euro debt crisis is gradually easing and political and territorial disputes are approaching settlements. Japan and the US are both enjoying significant recoveries. Vietnam is thus expecting to attract more foreign direct investment (FDI).

Dr Do Van Thanh, Deputy Director of the National Centre for Socio-Economic Information and Forecast (NCEIF), suggests Vietnam should concentrate on eliminating the national economy’s obstacles to investment and seize the emerging opportunities created by the international business environment’s improvements.

The Government should perpetuate its inflation control and macroeconomic stabilisation policies while maintaining appropriate economic growth and ensuring social welfare, Thanh says.

He also stressed the need to help local businesses through taxation and fee policy measures. Promotional campaigns could boost purchasing power and assist businesses with reducing inventories. Vietnam must capitalise on shifts in the flows of FDI and official development assistance (ODA) from Japan and India into Southeast Asia, Thanh notes.

A group of Banking Academy economists have also mapped out three economic scenarios for 2013. They posit GDP growth rates of 4.69, 5.44 and 6.01 percent, deeming the second hypothetical most likely.

Positive signs

Dr Nguyen Thi Kim Thanh, Director of the Banking Development Strategy Institute, says Vietnam’s 2012 export growth was impressive despite sharp consumption demand declines from key importers like the US, EU, and JapanShe says sustainable economic growth requires Vietnam to prioritise increasing total demand and stabilising the macroeconomy.

Credit growth should be bolstered and business expansion hurdles removed, Thanh says. She thinks the central bank should establish efficient channels of capital and consolidate consumer trust for further growth.

Many foreign economists have faith in Vietnam’s 2013 economic recovery, despite preexisting challenges. They predict the country’s GDP will grow by a modest 5.5 percent in 2013.

Dr Michael Krakowski, Chief Technical Advisor of the Macroeconomic Reform Programme in Vietnam (an initiative of the German development and cooperation organisation GIZ) points to the fact that the Vietnamese Government has undertaken drastic measures to stabilise the macroeconomy and maintain sustainable growth.. The country’s banking and business restructuring processes must continue to protect the future of the national economy. He acknowledges Vietnam’s constant economic reform efforts, its improvements to the business climate, and its investment efficiency increases. He also admires the remarkable results achieved by the combination of bank and business restructures and the shifting growth model.

In the 2013 fiscal year, Vietnam will receive nearly US$6.5 billion in ODA from international donors. It represents the confidence Vietnam’s foreign partners place in the national economic outlook.. ODA loans are  valuable resources that help Vietnam address short-term economic difficulties and lay  firm foundations for long-term economic growth.