Vietnam sees fastest growth in South-east Asia for two years

PRIME Minister Pham Minh Chinh is confident Vietnam’s growth will exceed expectations this year, and retain the title of South-east Asia’s fastest-growing economy through next year, as it emerges from the pandemic.

He expects gross domestic product (GDP) to rise 8 per cent in 2022 – faster than the median 7.3 per cent pace estimated in a Bloomberg survey – and expand 6.5 per cent in the following year.

In a speech to the National Assembly’s fall session, Chinh described the 2023 projection as “reasonable” given the many challenges and difficulties facing the economy amid a worsening global outlook. He said the current year’s GDP performance will also add a layer of challenge for growth next year by way of a higher base.

The prime minister’s annual address sets the economic direction for the year ahead and comes amid efforts to support a recovery from last year’s anti-virus lockdowns when factories were shuttered and global supply chains were crippled. Since then, the economy has rebounded as restrictions ended, domestic demand picked up and exports increased.

Vietnam posted a double-digit growth in the third quarter, with the government striving to balance between curbing inflation, shielding households from the impact of rising costs of living and maintaining the economy’s recovery momentum. The central bank is urging commercial banks to find ways to keep lending costs low, even after it delivered a rare monetary policy tightening with last month’s interest rate hike to curb inflation and stabilize the currency.

The government “will manage policies that can help economic recovery but will also be mindful about the risk of fueling inflation”, Chinh told the parliament. “The government will aim to maintain sufficient money supply for businesses while strictly controlling loans to potentially risky areas,” he added.

The government sees 2023 inflation at about 4.5 per cent, compared to 4 per cent this year. BLOOMBERG