Vietnamese Gov’t lowers GDP growth forecast to 3.5% this year

Vietnam’s GDP growth in 2021 is estimated at around 3-3.5% in 2021, which would translate into a GDP per capita of US$3,660-3,680.

Prime Minister Pham Minh Chinh at the National Assembly. Photo: VGP

Prime Minister Pham Minh Chinh revealed the figures during a hearing at the National Assembly today [October 20], referring to four out of 12 socio-economic targets set for this year that are unlikely to be met. 

These include the GDP growth to stay below the 6% objective and the poverty rate under multi-dimensional standards to be reduced by 0.5-1 percentage point against the target of 1-1.5 percentage points.

According to Chinh, the emergence of Covid-19 outbreaks and new variants have caused severe impacts on socio-economic activities.

“The economic resilience has weakened, reflected by the rising number of businesses suspending operation or waiting for dissolution, especially in localities under extended lockdown,” Chinh stressed.

For the first nine months of 2021, Chinh noted the macro-economic conditions remained stable with the consumer price index (CPI) expanding by 1.82% year-on-year, and is set to stay below 4% this year.

Meanwhile, state budget revenue during the nine-month period stood at 80% of the year’s target, and exports at $240 billion.

For the remainder of the year, Chinh expected the Government to soon issue an overall economic recovery plan, which serves as the basis for localities to carry out their own push for economic development.

“The Government is committed to working alongside the National Assembly in boosting production and ensuring that supply chains are intact,” Chinh said, adding the move is aimed at clearing all hurdles for efforts against the pandemic and eventually socio-economic development.

Chairman of the National Assembly’s Committee for Economic Affairs Vu Hong Thanh stressed the priority for the Government to address concerns of the business community, especially in lowering expenses in production and exports.

“It is imperative for each province/city to adopt extreme measures in Covid-19 restriction that may harm businesses’ operation,” Thanh added.

Thanh also called for the Government to better assess the Covid-19 strategy in line with economic recovery at the national and provincial levels.

The Committee requested the Government to reassess the efficiency of the model “3 on-site”, “one route, two destinations”, and the requirement for multiple Covid-19 tests.

Referring to the slow disbursement of public funds at 47.38% as of September, Thanh expected government agencies to speed up the process, especially in projects of national priority.

For next year, Prime Minister Pham Minh Chinh said risks of slow GDP growth remain in case the pandemic is not fully contained.

Therefore, the Government would continue to pursue the strategy of safe and flexible adaptation to the pandemic, along with stabilizing macro-economic conditions, inflation control, and enhancing economic resilience against external shocks.

For 2022, Chinh noted the GDP growth would be around 6-6.5%, inflation of 4%, and fiscal deficit at 4% of the GDP.