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How will the economy fare in 2023?

Vietnam’s economy had a prosperous year in 2022 with GDP growth rate of 8.02 percent, a one-decade high.

Le Trung Hieu, deputy general director of the General Statistics Office (GSO) said Vietnam obtained a high 8.83 percent growth rate in the first nine months of 2022, the highest level in 2011-2022, thanks to high growth rates of all three sectors. 

Minister of Industry and Trade Nguyen Hong Dien, when mentioning the success in 2022, emphasized the achievements in exports. 2022 was the sixth consecutive year that Vietnam had a trade surplus, with estimated export turnover of $342.21 billion, an increase of 13.4 percent over the same period last year.

Total import and export turnover hit over $700 billion, while trade and service activities grew strongly. The total revenue from goods and retail services in 2022 reached VND5.67 quadrillion, up 19.8 percent over 2021, a high growth rate compared to previous years.

Nguyen Viet Thang, general director of Hoa Phat Group, said despite difficulties in 2022, the sales of structural steel still increased slightly over 2021 (4.2 million tons), including 1.2 million tons of exports.

“We have export markets on all five continents. The development of new export markets has helped Hoa Phat diversify markets, and contributed to Vietnam’s trade balance,” Thang said.

In the retail industry, Masan Group CEO Danny Le said that the shift to modern retail is inevitable, so the retailer will continue investments in technological platforms and upgrading consumption value chains to allow consumers to have convenient shopping experiences.

“In 2022, we launched a new multi-utility retail model. Just in the last three months of the year, the number of WIN stores soared to 100 in Hanoi and HCMC. With encouraging initial business results, we will expand the model to have 500 WIN stores in 2023,” Le said.

In Q4 2022, the industrial sector faced difficulties as some processing and manufacturing industries declined because of lower global demand, especially from Vietnam’s large trade partners.

International institutions became more cautious when predicting Vietnam’s GDP growth rate in 2023. The International Monetary Fund (IMF) predicted a 6.2 percent growth rate, and ADB 6.3 percent and the World Bank 6.3 percent.

“The 6.5 GDP growth rate is a challenging target in the current context of the world’s economy and Vietnam,” Hieu said.

To obtain this growth rate, Hieu said the service sector is expected to have the highest growth rate. Domestic and foreign tourists are expected to increase, while eateries and transport will see a strong rebound.

The agriculture-forestry-seafood sector is under restructuring, shifting from agricultural production into an agriculture economy, and it has gained encouraging results in recent years. 

The processing and manufacturing industry is predicted to face difficulties in 2023, especially in H1, but enterprises all believe that textiles and garments, footwear, and woodwork will see a strong recovery.

Commenting about economic performance in 2023, the Ministry of Planning and Investment (MPI) pointed out several problems. The challenges caused by outside factors will increase, while existing problems internally will be clearer.

The fact that China has reopened its economy and implemented policies to stimulate growth in the short term may put pressure on Vietnam’s foreign investment attraction and goods.

Removing bottlenecks, promoting regional linkages

The bottlenecks in capital, public investment disbursement, corporate bonds and inflation are all problems mentioned in reports about Vietnam’s economy.

Nguyen Tri Hieu, a respected economist, said that Vietnam’s economy experienced many difficulties in 2022: goods prices escalated, the exchange rate fluctuated heavily by more than 3 percent, the stock market wobbled with the VN Index falling by 30 percent, and the corporate bond market froze in the last months because investors lost confidence in corporate bonds.

“The GDP may grow by 6.5 percent in 2023. The government should design a national credit moratorium program to avoid the collapse of the bond market,” he said.

“I hope that in H2, the economy will be more stable and sustainable, provided that the government accelerates public investment and speeds up the deployment of the VND350 trillion economic support package and the VND40 trillion interest rate subsidy program,” he added.

Nguyen Bich Lam, former general director of GSO, said the lower growth rate in Q4 2022 truly reflected the situation of the global and Vietnam economy. 

The 6.5 percent GDP growth rate in 2023 is a feasible target, but it won’t be easy  in the current global economy and the possibility that Vietnam’s important trade partners may fall into recession.

Discussing the driving force for economic growth, Tran Du Lich, an economist, mentioned the need to promote the roles of four localities – HCM City, Binh Duong, Dong Nai and Ba Ria - Vung Tau.

He said if the infrastructure can be exploited well, the four localities may obtain two-digit growth rates in the time to come, instead of just 8-9 percent.

Luong Bang


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