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Aug 24, 2018 / 11:42

Vietnam to ensure economic resilience against external shocks: PM

Internal and external challenges should be anticipated in a bid to secure sustainable development for Vietnam, Prime Minister Nguyen Xuan Phuc said.

The Vietnamese government will push forward with economic reform and growth model renewal, ensuring macro-economic stabilization and economic resilience against external headwinds, stated Phuc. 
 
Illustrative photo.
Illustrative photo.
In a meeting with the Prime Minister's Economic Advisory Group on August 23, the prime minister suggested the group to anticipate both internal and external challenges in a bid to secure sustainable development for Vietnam.

In particular, the group should come up with development strategies, pointing out new growth engines and priorities for Vietnam to focus on, Phuc added. 

According to the advisors, Vietnam's growth model has proven positive with productivity of nearly 6% in 2017, higher than the average rate of 4.6% in the 2012 - 2015 period. 

Additionally, the contribution of total factor productivity (TFP) to GDP in 2017 was 44% compared to 33.5% in the 2011 - 2015 period. 

The country's economic structure has shifted towards a higher contribution of the private sector to GDP, while export growth rate of the domestic sector was higher than that of the FDI sector in the first six months of 2018 (19.9% compared to 14.5%), according to the group.

However, the result is considered modest compared to the target, according to experts, requiring 2020 to be a solid foundation for a higher economic growth rate in the next five years, averaging 7 - 7.5% annually. 

This would be challenging with growing uncertainties in the global economy, which could potentially cause negative impacts on Vietnam's growth model, the group said. 

Under the group's calculation, productivity growth rate in subsequent years must be at a high level for the economy to achieve its targets in the 2021-2025 period. Specifically, for GDP of 6.85% in the 2018 - 2020 period and an average of 7 - 7.5% in the 2021-2025 period, productivity growth rate until 2020 should be 6.3% and gradually increase to 6.8%. 

The group also suggested the scale of corporate bond market should be 8% of GDP, 1% higher than the plan, while private investment should be equivalent to 15% of GDP. 

More importantly, the experts suggested the government should step up effort to reach the target of "regular budget spending below 64% of total expenditure."