Dr Can Van Luc: In the worst-case scenario, GDP would expand by just 4.5-5 per cent in 2022-2023.

DNHN - Dr Can Van Luc said on the morning of May 12 at the Forum "Vietnam Economic Forecast 2022-2023: Growth Scenarios and Prospects for Some Key Economic Sectors" that in the worst-case scenario, Vietnam's GDP would only expand by 4.5–5 per cent in 2022–2023.

The inflationary pressure is enormous.

Speaking at the Forum's inauguration, Deputy Minister of Planning and Investment Tran Quoc Phuong said, "Despite the international situation's many challenging changes in the first four months of 2022, our country's economy continues to grow in general." The economy has come back and shown signs of progress in many different businesses and areas. 

The Asian Development Bank (ADB) predicts that Vietnam's economic growth will return to 6.5 per cent in 2022 and reach 6.7 per cent in 2023; the World Bank (WB) predicts that GDP growth will reach 5.3 per cent in 2022 and then stabilize at 6.5 per cent.

The International Monetary Fund (IMF) reduced its prediction for world economic growth in 2022 to 3.6 per cent but thinks that Vietnam's economic recovery would benefit from the Recovery and Development Program's execution. socioeconomic advancement Vietnam's GDP will increase by 6% in 2022 and by 7.2 per cent in 2023.

But Deputy Minister Tran Quoc Phuong thinks that, in addition to having hopeful expectations, we need to be aware that problems are getting worse as the COVID-19 epidemic continues in the emergency scenario. International political-economic competitiveness is changing dramatically.

Dr Nguyen Bich Lam, former Director of the General Statistics Office, expressed worry that, although inflation was under control in the first four months of the year, inflationary pressures in the remaining months of 2022 and 2023 would be enormous.

Three major groups will exert inflationary pressure on the Vietnamese economy shortly: Supply chain inflation: raw material and fuel costs rose; aggregate demand grew as a result of supply network disruptions.

"Supply chain inflation is a combination of elements that will exert the most pressure on the economy's inflation shortly." Our country's economy is very open; manufacturing is largely reliant on importing raw resources from outside. Mr Lam said that with a 37 per cent share of the cost of imported materials in the overall cost of raw materials for the whole economy, this share accounts for 50.98 per cent of the manufacturing business-the industry that serves as a growth engine for the economy.

Dr Nguyen Bich Lam was worried about the effect of raw material costs, saying that if the price of raw materials rises by 1%, the price of output goods rises by 2.06%, implying an increase in economic inflation. As a result, the danger of imported inflation is unavoidable given that the nations that are Vietnam's biggest and most significant trade partners, such as the United States, the European Union, and South Korea, all predict inflation at alarming levels.

Dr Can Van Luc, member of the National Monetary and Financial Policy Advisory Council and Chief Economist of the Joint Stock Commercial Bank for Investment and Development Development of Vietnam (BIDV), updated the BIDV Training and Research Institute's forecast on two scenarios for GDP growth in 2022–2023 based on an analysis of the impact of major economic developments on Vietnam.

As a result, in the base scenario, Vietnam's GDP would rise by 5.5–6 per cent throughout this time; in the negative scenario, GDP will grow by just 4.5–5 per cent in 2022–2023.

Resistance to external shocks has been increased.

Dr Nguyen Bich Lam urged the government to quickly address challenges and hurdles connected to systems, policies, administrative procedures, and review while discussing ways to get the economy out of the "ghost" of inflation. Unjustified rules need to be taken away to lower firms' input costs, create a fair and open business environment, boost aggregate supply, and ease inflationary pressures.

Ensuring that the supply of each set of resources in each business is not dependent on a single market or area

The Ministries of Industry and Trade and Finance must be open and simplify the trade process; support and promote trade and pricing information exchange; and foster domestic competition in logistics, wholesale, and retail trade to minimize domestic and international trade costs.

Simultaneously, the State Bank of Vietnam and the Ministry of Finance work closely together to coordinate and harmonize monetary and fiscal policy. Having the proper monetary policy at the right dosage, being reasonable, and not too focused on monetary policy to eliminate obstacles and stimulate development via credit assistance and lower lending interest rates, which lead to rising inflation and hazard, which is a threat to the financial system.

Dr Can Van Luc said that for the economy to grow, the government needs to improve the business climate and carry out the socio-economic recovery and development program for 2022-2023.

accelerate economic transformation; growth model innovation; institutional improvement (correction of laws: land, housing, real estate business...).

"We must establish a green, circular, and digital economy, as well as support industries and economic resiliency." Mr Luc highlighted the need for a thriving stock market, real estate, and new-generation trade deals.

Duy Manh