Prime Minister Pham Minh Chinh is confident that Vietnam’s growth will exceed expectations this year and retain the title of Southeast Asia’s fastest-growing economy until next year as it emerges from the pandemic.
He expects gross domestic product to rise 8% in 2022, faster than the average pace of 7.3% estimated in a Bloomberg survey, and expand 6.5% the following year.
In a speech before the fall session of the National Assembly, 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 to growth next year through a higher base.
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The prime minister’s annual address sets the economic direction for the coming year and comes amid efforts to support recovery from last year’s anti-virus lockdowns when factories were shuttered and global supply chains ground to a halt. Since then, the economy has recovered as restrictions were lifted, domestic demand recovered and exports increased.
Vietnam posted double-digit growth in the third quarter, with the government struggling to balance lowering inflation, shielding households from the impact of cost-of-living increases, and maintaining the economy’s recovery momentum. The central bank is urging commercial banks to find ways to keep borrowing costs down, even after applying a rare tightening of monetary policy with last month’s interest rate hike to curb inflation and stabilize the coin.
The government “will administer policies that can help economic recovery, but will also take into account the risk of driving inflation,” Chinh told parliament. “The government will try to maintain enough money supply for businesses while strictly controlling lending to potentially risky areas,” he added.
The government forecasts inflation for 2023 of around 4.5%, compared to 4% this year.
