The Vietnamese Trade Office in Singapore has unveiled its intention to beef up Vietnam-Singapore business connection and the volume of Vietnamese exports to the Singaporean market. The office will help Vietnamese businesses access the market, popularising their products there.

Singapore is currently Vietnam’s fifth biggest trade partner in ASEAN, with bilateral trade hitting 9.1 billion USD last year, up 11.6% annually. In the first two months of 2023, the trade turnover surpassed 1.03 billion SGD (770.86 million USD).

The Ministry of Industry and Trade said the two countries are not too far away geographically, but the number of Vietnamese farm produce, food and consumer products entering the island nation remains modest. Given its increasing importance in many regional economic links via joining 16 free trade agreements, the country has secured a good basis to boost exports to markets in the region, including Singapore.

Singapore is a demanding market particularly concerning agro-fishery products. The trade office said placing foreign goods on shelves in the market is painstaking and costly, recommending Vietnamese firms sustain the quality of their products in line with Singapore’s requirements.

The office noted that it has recently received a request from the Singapore Food Agency for contact with Vietnam’s major fruit, vegetables, animal husbandry, and egg companies in preparation for its sending of a delegation for business networking and investment promotion in these sectors.

Vietjet to launch direct route connecting Da Lat with Busan

Vietjet has announced that it will operate the first direct route connecting the resort city of Da Lat in the Central Highlands province of Lam Dong with Busan, the largest coastal city of the Republic of Korea, in July.

Accordingly, the leading Vietnamese new-age carrier will operate seven flights per week, starting July 13. Flights take off from Lien Khuong Airport in Da Lat at 1:25am (local time) and land in Gimhae airport in Busan at 8:00am (local time), while flights from Gimhae airport (Busan) to Lien Khuong airport (Da Lat) take off at 9:30 am (local time) and land at 12:15 am (local time).

On the occasion, Vietjet is offering passengers three golden days with attractive promotions applicable to all routes between Vietnam and the RoK from only 0 VND from April 25-27.

AgroChemEx Vietnam 2023 kicks off in Ho Chi Minh City

The fourth international exhibition on fertilizers, pesticides, and agrochemicals (AgroChemEx Vietnam 2023) officially got underway in Ho Chi Minh City, attracting nearly 70 Chinese businesses and numerous local firms.      

Thiet underlined the need to tighten control over import and export activities, and make full use of agricultural materials, especially fertilizers and pesticides, towards the ultimate goal of developing an ecological, organic, circular, and low carbon agriculture moving forward.

The expo creates fresh opportunities for both Vietnamese and Chinese enterprises to gain greater insights into management regulations, ramp up linkages in technology transfer in the production of fertilizers, pesticides, and agrochemicals after a period of hiatus caused by the COVID-19 pandemic.

A number of seminars and trade exchange events are scheduled to be held during the two-day event.

Business associations seek to iron out snags and boost exports

Representatives of major business associations put forward solutions aimed at removing difficulties and increasing exports at a conference held on April 25 in Ho Chi Minh City.

Tran Nhu Tung, vice president of the Vietnam Textile and Apparel Association (VITAS), pointed out that the garment industry, one of the major hard currency earners of the national economy, is currently facing difficulties due to a steep fall in export orders globally, especially to major markets such as the European Union and the United States.

Over the short term, it is imperative to strengthen trade promotion between Vietnam and other countries to expand export markets through the network of Vietnamese Commercial Counselors abroad, with a particular focus on countries in the EU and the Comprehensive and Progressive Agreement for Trans-Pacific partnership (CPTPP) where Vietnam has signed bilateral trade agreements, he said.

He suggested that the Government move to introduce a preferential loan package with an interest rate of 0%, similar to the loan package that the social policy bank had offered during the COVID-19 period, in order to help businesses partly reduce financial pressure and pay wages for employees and retain employees.

Nguyen Hoai Nam, deputy general secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP), shared difficulties faced by the seafood processing industry, saying that seafood exports nosedived by 27.5% in the first quarter of the year, equivalent to the industry’s decrease during the height of the COVID-19 pandemic. It is forecast that seafood exports will continue to face more difficulties this year, especially amid its main export markets such as the US, Europe, and Japan all shrinking.

He suggested that the interest rate for bank loans in US$ should be reduced to remove capital bottlenecks, making it easier for businesses to purchase raw materials. In addition, he said the Government should introduce a credit package worth VND10 trillion with low interest rates as a way of assisting with the purchase of raw materials and helping farmers and fishermen maintain production. This is just a workaround solution, but it is necessary in the current period, he stressed.

Nguyen Ngoc Nam, president of the Vietnam Food Association (VFA), said that despite rice exports increasing thanks to rising global demand coupled with high export prices, the results have yet to live up to business expectations. He pointed to the fact that most rice businesses are small and medium sized, meaning their financial resources are limited. He therefore suggested that the State Bank implement a credit policy mechanism for the rice industry.

Nguyen Dinh Tung, vice president of the Vietnam Fruit and Vegetable Association, proposed that the State Bank consider products grown on land such as durians and longans as assets which can be mortgaged in order to help businesses access bank loans.

Thailand’s packaging company to expand business in Vietnam

Bangkok-based SCG Packaging Plc (SCGP) has announced that it is acquiring a 70% stake in Starprint Vietnam JSC (SPV) for 1.53 billion BTH (44.5 million USD) to take advantage of positive prospects in Vietnam.

The asset acquisition is expected to be completed in the third quarter this year, helping the company improve product sales, including offset folding cartons, rigid boxes and luxury packaging products.

Wichan Jitpukdee, Chief Executive of SCGP, said that the company will continue to expand its business into markets with good business opportunities and Vietnam is a high-potential market with growing demand for packaging products.

SPV has a prominent client base and long-term track record of commercial relationships with renowned multinational and national companies, boasting a portfolio linked to high growth and fast-moving consumer products, he said.

The Vietnamese company has a combined capacity for 16,500 tonnes of offset printing a year and 8 million pieces of rigid boxes per year, with two manufacturing facilities located in Long Binh (Amata) Industrial Zone in the southern province of Dong Nai.

In fiscal 2022, SPV recorded 43 million USD in revenue, net profit after tax of 4 million USD, with assets worth 19 million USD.

SCGP expects to spend an investment budget of around 18 billion THB (524 million USD) in 2023, with 50% allocated to merger and partnership projects. The remainder will support business expansion and maintenance projects.

Ben Tre promotes high-tech shrimp farming

The high-tech shrimp farming in the Mekong Delta province of Ben Tre has proven effective with the farming area in coastal districts increasingly expanded, generating high profits for local farmers.

According to Chairman of the provincial People’s Committee Tran Ngoc Tam, after more than two years implementing a plan to develop 4,000 ha of cultivation area with advanced technologies applied by 2025, Ben Tre has so far developed 2,867 ha of this kind which produced a total 116,500 tonnes of products, equivalent to 68% of the set plan.

The plan for developing the shrimp industry in Ben Tre for the 2021-2030 period, with a vision to 2050, has been approved by the provincial People's Committee, aiming to  form concentrated shrimp production areas, increase the value of products, and adapt to climate change, Buoi said.

Accordingly, the locality has decided to develop 11 high-tech concentrated shrimp farming areas in three districts of Binh Dai, Ba Tri, and Thanh Phu. The provincial agriculture authority will call on enterprises, especially shrimp processing firms, to link up with cooperatives in the districts in building an increasingly improved shrimp value chain.

To make a breakthrough in developing the shrimp farming industry into a major commodity production sector, Ben Tre aims to expand the brackish water shrimp farming area to 41,500 ha by 2025, including 4,000 ha applied with advanced technologies.

Vietjet Air introduces insurance package Sky Care

To celebrate direct flight routes from Vietnam to Australia, Vietjet Air has introduced a comprehensive insurance package Sky Care with benefits of up to 100 million VND (4,300 USD) for passengers from April 25, 2023.

Sky Care travel insurance is a special insurance programme designed exclusively for passengers on direct flights from Vietnam to Australia and vice versa with benefits such as reimbursement of medical expenses incurred due to accidents or illnesses (including COVID-19), flight-related problems including flight delay, baggage delay, baggage loss or damage, and lost travel documents, and Global Travel and Medical Support Services 24/7.

Accordingly, passengers who successfully purchase tickets and fly between Vietnam and Australia (Melbourne, Sydney, Brisbane), and vice versa, will automatically receive Sky Care travel insurance. It is applicable to all ticket classes including Eco, Deluxe, SkyBoss, and SkyBoss Business. 

Moody’s upgrades Sacombank’s credit rating outlook to positive

International credit rating agency Moody’s has recently adjusted the credit rating outlook of Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) from "stable" to "positive".

This adjustment reflects Moody's assessment of the continuous improvement of Sacombank's credit capacity through the handling of bad debts and the disposal of non-performing assets. In addition, Sacombank's asset risk rating has been upgraded from Caa1 to B3.

Moreover, Moody's said Sacombank has the smallest interbank funding dependence ratio among the rated banks.

It also reaffirmed Sacombank's long-term deposit and issuer ratings at B3 thanks to the bank's efforts in carrying out its restructuring strategy. The agency made positive predictions about Sacombank's potential upgrade within the next 12-18 months.

HCM City discusses socio-economic cooperation with US firms

The Ho Chi Minh City Investment and Trade Promotion Centre (ITPC) and the American Chamber of Commerce (AmCham) in Vietnam held a workshop on April 25 to acquire businesses’ feedback on socio-economic cooperation.

Speaking at the event, Chairman of the municipal People’s Committee Phan Van Mai said the city is collecting opinions from local businesses, associations and economists on a scheme to improve the efficiency of its foreign direct investment attraction for the 2023-2025 period with a vision to 2030. It aims to build the city into a modern service-industry and industrial hub, a front-liner in digital economy and society; an economic, financial, commercial, scientific-technological, and cultural centre in Southeast Asia.

Mai hoped that the US firms would share information with the city in the fields of capital market and financial services, digital economy and technology, manufacturing, supply chains and logistics, energy, health care and education to further improve its business environment and propel economic growth.

The municipal authorities will specify the responsibilities of relevant agencies for dealing with difficulties faced by businesses, especially foreign enterprises, he said, adding that the city is committed to creating a stable business environment, protecting the legitimate rights and interests of investors, and offering all possible support to US enterprises to do business stably, sustainably and effectively there.

AmCham Chairman Gregory Testerman, for his part, said Ho Chi Minh City has overcome the most difficult period of the COVID-19 pandemic, creating trust among the business community about the prospect of stable growth in the next 3-5 years. However, challenges ahead remain due to the impacts of economic recession trend in the US, North America, and Europe.

AmCham also suggested the city continue improving visa application process for entrepreneurs and investors to not miss out on opportunities to attract foreign resources.

US Consul General in Ho Chi Minh City Susan Burns said AmCham in Vietnam is constantly growing with more than 2,000 members investing billions of USD in the city at present.

Da Nang conference discusses Vietnam - RoK novel industry cooperation

A conference was held in the central city of Da Nang on April 25 with a focus on the fourth Industry Revolution (Industry 4.0) and the prospects of the Vietnam - Republic of Korea (RoK) cooperation in new industries.

The RoK’s Consul General in Da Nang, Kang Boo-sung, said future technologies that are innovative and representative of Industry 4.0 are being implemented. Such technologies as the Internet of Things, robots, virtual reality, and artificial intelligence (AI) are no longer imaginary.

For future prosperity, both Vietnam and the RoK should not only quickly respond to changes generated by Industry 4.0 but also proactively make adaptation, he said, stressing that the two countries have become the most important partners of each other in most areas over the last 30 years.

Vietjet opens Can Tho-Quang Ninh route

Vietjet inaugurated the first route connecting the Mekong Delta city of Can Tho and Van Don in the northern province of Quang Ninh on April 25, opening up opportunities to develop tourism and trade much more easily than ever between two major economic regions.

The new-age carrier provides service on the route with two return flights per week on Tuesdays and Saturdays.

With flight time of two hours and 20 minutes, it’s easy for people to travel from the capital of the Southwest region to Quang Ninh, the key economic region of the Northeast, home to the world’s natural heritage Ha Long Bay.

Fresh foreign investment in Viet Nam up 11.1% in 4 months

Viet Nam attracted 750 new foreign-invested projects, worth over US$4.1 billion in the first four months of this year, up 65.2 per cent in the number of projects and 11.1 per cent in the level of capital, according to Foreign Investment Agency (FIA) under the Ministry of Planning and Investment.

The growth of the number of new projects was much higher than that of investment capital, which demonstrated that small and medium-sized foreign investors continued to believe in the country's investment environment, the FIA has said.

It added that new foreign-invested projects still focused on provinces and cities that had many advantages in attracting foreign investment including good infrastructure, stable human resources, efforts to reform administrative procedures and effective investment promotion. Among these localities were Ha Noi, Bac Giang, HCM City, Binh Duong, Dong Nai, Bac Ninh and Hai Phong.

During the period, the country allowed 386 operating projects to raise their capital by nearly $1.66 billion, up 19.5 per cent in volume but down 68.6 per cent in value.

A decline in adjusted capital in four months, however, was lower than 70.3 per cent seen in three months; 85.2 per cent in two months and 76 per cent in the first month, according to the agency.

Besides, the number of operating projects which saw capital added increased sharply instead of a modest rise of 2.6 per cent in three months and a slump of 6.3 per cent in two months. That once again confirmed investors' confidence in Viet Nam's investment environment and continued to expand their existing projects in the country, the FIA noted.

At the same time, foreign businesses were also approved to pay over $3.1 billion for capital contribution and share purchases in a total of 1,044 transactions, marking yearly increases of 70.4 per cent in value and 2 per cent in volume.

However, disbursement of foreign investment saw a slight decline of 1.2 per cent, to an estimated $5.85 billion in the period, the FIA said.

Six traditional investment partners of Singapore, Japan, mainland China, Taiwan, Hong Kong and South Korea accounted for 75.1 per cent of the country's total investment capital in January-April.

Of them, Singapore ranked first with nearly $2.2 billion, equivalent to 24.7 per cent of the total, ahead of Japan with around $2 billion or 22.1 per cent, and mainland China with nearly $752 million or 8.5 per cent.

The manufacturing and processing sector attracted the lion's share of foreign investment with over $5.1 billion, down 17 per cent year-on-year or equivalent to 57.8 per cent of the total.

Banking and finance came next with over $1.5 billion, increasing more than 12 times over the same period last year or making up 17 per cent of the total.

Real estate and wholesale and retail sectors were the runner-ups with nearly $972 million, down 65.5 per cent and $372 million, down 44.3 per cent, respectively.

Banking sector must aid businesses for faster economic recovery: PM

The Government has ordered the State Bank of Vietnam and the banking sector to quickly implement additional policies to help speed up economic recovery and provide support to businesses across the country in a meeting in Ha Noi yesterday, chaired by Prime Minister Pham Minh Chinh.

The Prime Minister said economic development had experienced some setbacks, with a recorded growth lower than last year. To adapt and, more importantly, to move the economy in the right direction, additional support for businesses and citizens must be a top priority.

He said timely policies by the central bank regarding the finance and banking sector have resulted in positive feedback from the business community and citizens, while helping speed up economic recovery and production across all economic sectors.

Looking forward, he stressed the importance of implementing banking policies as tools to efficiently mobilise the country's resources, especially those of land and capital, and to overcome challenges.

He said that government agencies and ministries must stand side-by-side with businesses in finding solutions to such challenges.

He stressed the importance of investing in affordable housing for middle-income and low-income groups, saying it has long been neglected and that the pandemic has made it clear there is still much work to be done to improve the situation.

In addition, changes must be made to maintain stability and improve the liquidity of the property market, especially in current credit and finance regulations.

He urged the central and commercial banks to continue implementing additional policies in support of property developers, such as bringing down current interest rates, which have been reported as unsustainably high by the industry.

In addition, he instructed local governments to look into administrative issues that still hinder many property projects' progress, saying it's equally important to developers for such issues to be resolved promptly. 

Import, export turnover across northern border soars

The northern border gates have been restored after three years of stagnation.

This helped Viet Nam's import-export turnover with China through the northern border provinces increased by 242 per cent in the first quarter of this year over the same period last year.

The General Department of Customs said that the total import and export turnover with China across the northern border reached nearly US$9.3 billion in the first quarter of this year, up nearly three times over the same period last year.

In the northern border provinces, most of the border gates that were closed in the last months of last year due to the Chinese implementation of measures to prevent and control the COVID-19 pandemic have now become busy again.

Preliminary statistics from Lang Son Customs Department show that border-gate customs units have received and processed 23,985 sets of import and export declarations with a turnover of $622,446 million by the end of March 14, an increase of 54.5 per cent over the same period last year.

In which, the number of export goods declarations registered by enterprises with 10,560 sets of declarations, valued at $284,386 million, an increase of 348.9 per cent year-on-year.

In Cao Bang, import and export turnover through the locality also grew sharply, up to 60 per cent, reaching $69.5 million. Notably, export turnover rose by 214 per cent.

Import and export turnover through Lao Cai international border gate reached nearly $186 million in the first three months of this year.

Of this figure, exports reached $92.4 million, up 90.1 per cent over the same period last year. Imports reached $93.2 million, up 15.2 per cent.

Notably, agricultural products are still the main export products, reaching a turnover of more than $71 million, up 63.2 per cent year-on-year and accounting for 76.8 per cent of export turnover.

Similarly, the Mong Cai Border Gate Customs Sub-Department under the Quang Ninh Customs Department revealed statistics that the total import-export turnover hit $504.96 million in the past three months; a 102.01 per cent increase in declarations.

Particularly, export goods of border residents grew by 288.96 per cent in declarations and 134.86 per cent in turnover over the same period last year.

In order to have this positive result, the customs offices located in these localities have made great efforts to coordinate with the functional forces to carry out customs procedures, inspect and supervise goods quickly to facilitate business timely delivery to the partner’s side.

Some provinces have reached agreements with the neighbouring country’s localities to increase the working time of the day to support businesses, said Bui Minh Hai, a representative from the Customs Supervision and Management Department under the General Department of Viet Nam Customs.

Despite many positives, it is undeniable that the import and export results with this important partner have not reached the same pace as before. Part of the cause was determined to be due to side gates, as the openings are still frozen.

Hoang Duc Hau, deputy director of Cao Bang Customs Department, said that the locality had many border gates, but the side border gates and openings still did not have import and export activities, therefore, they could not promote the strengths of a province that has many border gates adjacent to China.

So are Lang Son, Lao Cai and Quang Ninh, although the authorities have created maximum convenience for import and export activities in the area, but in order to further strengthen the customs clearance capacity, many recommended that localities needed to step up exchanges and talks at all levels with the Chinese side to restore side border gates and extend the working time of the functional forces on the Chinese side at border gates.

Central bank eases control over corporate bond buybacks

The State Bank of Vietnam (SBV), the central bank, is providing much-needed support for the illiquid corporate bond market by making it easier for local banks and branches of foreign banks to buy back corporate bonds.
On April 23, the SBV issued Circular 03/2023, suspending Clause 11, Article 4 of Circular 16/2021/TT-NHNN on trading corporate bonds by foreign credit institutions, effective from April 24 to December 31, 2023.

The new circular aims to spur corporate bond market growth amid a liquidity crunch as directed by the Government. With this, banks and foreign bank branches can buy back corporate bonds issued by unlisted companies within 12 months after they were issued.

Circular 16 bans banks from repurchasing the bonds they sold within 12 months and regulates that they are allowed to buy back part of the bonds they sold under some specific conditions.

The corporate bond market grew by leaps and bounds in the years before 2022, with bond sales totaling VND462 trillion in 2020 and VND658 trillion in 2021, showed data from the Vietnam Bond Market Association.

However, the market saw a steep decline in 2022 due to arrests related to securities market fraud, resulting in bond issues plunging to VND255 trillion in the year and making it greatly difficult for debt-ridden companies to sell bonds.

Corporate bond issues have ground to a halt since, with almost no corporate bond issues in January.

Though the market has shown signs of recovery, with corporate bonds worth VND26,425 billion issued in March, the total value of corporate bond issues in the first quarter this year plunged 60% year-on-year at VND28,556 billion.

Banks allowed to reschedule debt

Banks can now reschedule debt owed by corporate clients, according to a new circular issued by the State Bank of Vietnam (SBV).

Circular 02, which is in force until June 30, 2024, permits banks to extend debt repayment and keep debt classfications unchanged for debtors who are struggling to repay loans. This paves the way for banks to have resources to lend.

Local banks and foreign bank branches are required to review the status of debtors and make decisions regarding the debt repayment terms, provided the delay does not surpass 12 months from the due date.

Meanwhile, banks are required to make credit risk provisions for the debt they extend.

The new circular, which came out on April 24, is expected to address hurdles faced by individuals and corporations, shorten operating cycles and make access to new loans easier, according to the SBV.

Authorities to oversee prices of social homes

The Ministry of Construction would inspect the real estate sector, particularly social housing projects that are offered at higher prices than normal, said the ministry at its quarterly press conference on April 24.

With many social housing projects advertised to be sold at a price hundreds of millions of dong higher than its original price, Hoang Hai, head of the Housing and Real Estate Market Management Department under the Ministry of Construction, said that there had been strict regulations on conditions and procedures for the trading of social homes.

The ministry also consulted provincial construction departments over the sanctions against administrative violations.

The ministry requested localities to review, inspect and take strict sanctions against speculation on social homes.

From this June, the ministry will work with localities to conduct inspections into property trading, including advertising to sell social housing at prices above normal levels.

A Ministry of Construction report said that in the first quarter of this year, one social housing project with 300 units was licensed, five projects with 1,908 off-plan units were eligible for fundraising from homebuyers and four projects with 934 units were completed.

Meanwhile, at least 453,400 units in 397 social housing projects are being built.

ADB commits US$20.5 bln to support economic recovery in Asia and Pacific

The Asian Development Bank (ADB) committed US$20.5 billion from its own resources in 2022 to help Asia and the Pacific continue its recovery from the COVID-19 pandemic despite fresh economic headwinds and crises.

In its Annual Report 2022 released Monday, the international lender summarized how it combined finance and knowledge, and leveraged partnerships to help the region cope with economic shocks exacerbated by the Russia-Ukraine conflict, worsening food crisis, and extreme weather events.

The US$20.5 billion comprises loans and guarantees, grants, equity investments, and technical assistance provided to governments and the private sector. ADB has mobilized an additional US$11.4 billion in co-financing.

ADB committed US$6.7 billion in financing for climate mitigation and adaptation in 2022, making progress toward its ambition of providing US$100 billion in cumulative climate financing during 2019–2030.

To address the region's worsening food crisis, ADB provided US$3.7 billion under its US$14 billion food security program, delivering essential food relief for people most in need and strengthening food production systems.

To support economic recovery, ADB financed institutional reforms, strengthened public service delivery, and growth in key economic sectors. ADB's US$3.9 billion in commitments to the private sector included vital liquidity support to enterprises facing a difficult business environment.

Meanwhile, the bank made wide-ranging investments in quality infrastructure as well as in education, health, and other social sectors that contributed to building economy-wide resilience.

Promoting gender equality remained at the forefront of ADB's work, with 97 percent of the bank's operations in 2022 contributing to this agenda. These operations included initiatives to improve women's access to quality jobs, foster women's entrepreneurship, and build women's resilience to climate change.

Digital transformation documents launched

The Ministry of Planning and Investment (MPI) has just announced the publication of the "Yellow Pages of Digital Transformation Providers" with more than 50 digital transformation solutions.

Speaking at an event to launch the documents, Deputy Minister of Planning and Investment Tran Duy Dong said that the yellow pages would provide useful information for businesses to look for and choose appropriate digital transformation solutions to save costs and time for businesses. 

According to the MPI's Agency for Enterprises Development, to build the "Yellow Pages of Digital Transformation Providers," independent experts considered, classified and selected 40 businesses that were providing popular digital transformation solutions, suitable for business activities, especially SMEs, and then conducted a direct appraisal for each solution.

Four professional groups of digital transformation solutions are highlighted in the publication: general solutions for many fields and industries (56 per cent); a production solutions group (14 per cent); group of solutions for infrastructure and information management (10 per cent), and a group of specific solutions (20 per cent) for healthcare, petroleum, transportation and logistics, and traceability.

Under technical support from the USAID through the LinkSME project, the programme has been widely deployed nationwide and has been appreciated by the business community.

There have been more than 2 million visits to technical support on digital readiness assessment, and digital transformation manuals.

Thousands of businesses in nearly 40 provinces and cities have been trained; and more than 200 businesses have received in-depth consulting on the digital transformation roadmap.

After two years implementing the programme, businesses have made clear changes in their awareness of the need for digital transformation. Many businesses have entered the stage of data digitisation, process standardisation, digital technology application and digital transformation on a broader and more synchronous scale.

OECD forecasts Vietnam’s economic growth at 6.5% this year

The Organisation for Economic Cooperation and Development (OECD) has forecast that Vietnam’s economy will grow firmly, with its GDP projected at 6.5% in 2023 and 6.6% next year, according to an economic survey announced at a ceremony in Hanoi on April 26.

This is the first report on Vietnam’s economy conducted by the OECD in conjunction with the Asian Development Bank (ADB).  

Vietnam has made remarkable economic progress over the past decades, sustaining high growth, said Acting Deputy Director of the OECD’s Economic Country Studies Branch Vincent Koen, calling extensive and continued reforms since the 1980s a key to this success.

He said the economy has also proven resilient to shocks, including the COVID-19 pandemic, noting that during the outbreak, Vietnam was outstanding among other Southeast Asian nations in terms of economic growth.
 
 The economic survey is announced in Hanoi on April 26. (Photo: VNA)
According to the OECD, the openness of Vietnam’s economy leaves it exposed to geopolitical uncertainties and potential supply chain disruptions. Weathering significant challenges ahead, Vietnam needs to make additional efforts to advance structural reforms that will further strengthen market forces.

To reduce dependence on fossil fuels, new investment in coal should be halted and the implementation of a carbon market accelerated. As these reforms will require additional fiscal resources, the tax base should be expanded to enhance government revenues.

The survey suggested Vietnam consider providing targeted financial support to households strongly affected by high energy and food prices, prepare a concrete medium-term fiscal consolidation plan to further enhance revenue, expand the tax base, continue to simplify business regulations, and enhance digital skills.

To guide all economic sectors to a low carbon path, a clear and predictable long-term climate change strategy should be prepared. This strategy should include an energy sector reform which is crucial to upscale investment in renewable strategy, it said.

Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes