- Mr. Vu Tien Loc, Chairman of Vietnam Chamber of Commerce and Industry (VCCI) used two keywords to describe 2019 as “challenging and courage”. In the extremely difficult context under the impact of climate change, the world economy deceleration, the US – China trade war bringing many problems to Vietnam’s economy, Vietnam’s business community very bravely rose up with 140,000 newly established enterprises, or 180,000 enterprises if including the enterprises resuming their operation, which brings Vietnam’s economy to rank the 50th in term of growth over the globe.
- Mr. Nguyen Tu Anh, Deputy Director of Monetary Policy Department, SBV also considered 2019 a successful year of operating monetary policy to ensure the balance of payments and stable capital flows that stabilized the economy. Thereby, 2019 marked the breakthrough of the private sector. National exports increased by 8% but the private sector increased by 18%.
- Mr. Vo Tri Thanh, Economic expert, gave a relatively comprehensive picture in the context of a global economic slowdown of only 3% growth with many unpredictable fluctuations, Vietnam’s economy in 2019 still has many notable highlights, such as GDP increased by over 7.0%, the highest increase in the world and the region with the main driving force being the manufacturing and processing industry (up 11.3%). The realized social investment capital increased by 10.2% compared to 2018 the biggest of which is the individual economy with an increase of 17.3%, accounting for 46%, a record high ever. FDI capital continued to maintain its growth momentum, estimated at 20.4 billion USD, up 6.7%. Merchandise exports reached over 263 billion, up 8.1% with a strong acceleration of the domestic economic sector. Trade surplus reached 9 billion USD, the highest in 4 consecutive years of trade surplus.
Vietnam’s economic growth in 2019 in several areas chart
- However, despite the above-mentioned achievements of 2019, experts still pointed out the remaining weaknesses such as high outstanding public debt and debt repayment cost given that Vietnam is no longer enjoying preferential loans. The Vietnam population ageing rate is among the highest in the world. Although interest rates have gradually decreased, it is difficult to reduce interest rates because of the mismatch between long-term capital and short-term capital. In this context, each enterprise is required to bring about a lot of innovation and creativity, find new ways, and the Government needs to make reform efforts so that Vietnam’s economy can “accelerate” in 2020.
Manufacturing and processing sector has high growth of 11.7% but the inventory is also at a very high level (17% as of September 30, 2019). Vietnam tourism has got approximately 18 million guests but has reached the tipping point according to the World Bank. Without infrastructure improvements, the service will have many implications because any growth would be detrimental without the corresponding development. 70% of the State budget revenue belongs to FDI enterprises. Revenues from production and business to the state budget did not reach the target even though it was adjusted down.
- In terms of exports, most markets declined, except for the US market, which is rising but still gives rise for concern. Contributing to the gross domestic product (GDP), up to 30% of Vietnam’s GDP comes from family-owned businesses, a rudimentary economic sector. Besides, we also witnessed the real estate market and the stock market have not improved much over the year. Although we have improved the business environment, it is still not high. The new business environment ranks 5th in ASEAN, so a journey is still very long to enter the top 4.
Economic structure element in several areas chart
- Especially according to Mr. Loc, the institutional reform is very important in 2020. In 2016, Vietnam succeeded in cutting down business conditions. However, according to VCCI’s statistics, there are still 25 overlapping points in the law on business investment that need to be reformed. If we focus on addressing legal bottlenecks related to business investment, this will be a big breakthrough in 2020.
- Further analyzing the opportunities for economic growth in 2020, Mr. Vo Tri Thanh emphasized that Vietnam needs to balance more between economic growth and environmental and social factors. By 2020, the world economy is forecast to continue to slow down and be uncertain. With the current US – Iran political movement, inflation will increase. Meanwhile, industrial growth in the fourth quarter of 2019 has slowed down apart from the current world’s economic situation, Vietnam will need to be more precautious with growth.
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