Reducing the VAT (value added tax) by 2 percent has been the most practical solution to stimulate consumption and production.

The Central Institute for Economic Management (CIEM) has developed two scenarios for the Vietnamese economy in 2023 after an 8% growth rate was recorded in 2022.

Last year, Vietnam’s economy recovered impressively with GDP growth of 8.02%, far exceeding the target of 6-6.5% set by the National Assembly and the Government.

“Industrialization means that we have to produce many things ourselves so that our industry can move higher.”

Vietnam’s GDP growth in 2023 has been adjusted upward to 6.8% in the ASEAN+3 Macroeconomic Research Office (AMRO)’s January Update, up from 6.5% in its October report.

Many enterprises flourished in the first half of the year thanks to high exports, but had slower business in the last six months.

Vietnam is striving to become a developed nation with high income, full and harmonious socialist-oriented market economy institutions, and a fair, democratic and civilised society by 2050.

A draft plan on the restructuring of the industry and trade sector targets average annual growth of over 8.5% in added industrial value.

Falling orders caused by weak demand have left firms with no choice but to shed jobs and scale down production in the last months of the lunar year.

The confidence of European enterprises in Vietnam’s economy declined for a second quarter but the S-shaped country still remains in the top five global investment destinations for their companies.

Although the economy was forecast to continue facing difficulties and challenges in 2023, there were silver linings to pin hope on, experts said.

In spite of a slowdown in industrial production, confidence among the business community is expected in increase, while being backed by the government’s sturdy efforts to provide enterprises a more business-friendly climate to play in.

Despite the Business Climate Index (BCI) falling to 48.0 points in the fourth quarter of 2022, Vietnam remains among the top global investment locations, according to the European Chamber of Commerce in Vietnam (EuroCham).

The Central Institute for Economic Management (CIEM) under the Ministry of Planning and Investment has sketched out two scenarios for the Vietnamese economy in 2023.

In the context that most capital mobilisation channels are tightening, public investment is considered an important driver for boosting economic growth.

Vietnam has made a go of bringing inflation under control in 2022 thanks to the government’s great efforts to rein in market prices, with praise from various international organisations.

With overall growth momentum likely to moderate further this year, UOB has kept its 2023 GDP growth forecast at 6.6 percent.

The Vietnamese economy will continue to expand vigorously in 2023 on the back of its strong recovery in the previous year, according to Standard Chartered.

Vietnam’s GDP grew by 8.02 percent in 2022, the sharpest growth rate since 2007. Meanwhile, the inflation rate was only 3.15 percent, a nice surprise if noting that pressure on inflation was low.

Vietnam’s economy totaled US$409 billion in 2022, or 10 times higher than that in 2000, according to the Government’s report released Tuesday.