Vietnamese Gov’t targets GDP growth of 7% in 2022

Based on Vietnam’s economic performance in the first six months of the year and expectations for the remainder of 2022, the Ministry of Planning and Investment (MPI) expected the economic expansion rate may hit 7% this year, 0.5 percentage points higher than the Government’s target of 6.5%.

Minister of Planning and Investment Nguyen Chi Dung at the meeting. Source: VGP

MPI Minister Nguyen Chi Dung forecast at the monthly Government meeting held today [July 4].

According to Dung, Vietnam’s economy has been firm on the recovery track with the GDP growth in the second quarter at 7.72% year-on-year, the highest second-quarter growth since 2011.

This lifted the overall six-month GDP growth to 6.42% year-on-year, higher than the 5.74% rate in the same period of 2021, and equivalent to the pre-pandemic period in the 2016-2019 period (6.38%).

Dung put forth two growth scenarios for the remainder of the year. In the baseline case, Vietnam’s GDP growth would expand by 6.5% for 2022, in which the third-quarter growth would be 7.9%, and the fourth quarter by 5.5%.

In a more optimistic case of the 7% GDP growth in 2022, the economy in the third quarter would need to expand by 9%, and the next quarter by 6.3%.

Amid the complicated global situation and uncertainties in both domestic and international economic contexts, Dung expected budget revenue would remain positive and put the Government in a position to better support businesses, and people in case of necessity.

“Monetary policy should be managed in both a flexible and cautious manner to deal with risks of inflation and exchange rates,” Dung said.

He also called for the banking sector to continue cutting interest rates on loans, which remains significant amid high inflationary pressure.

“Trade policy should be active to ensure sufficient supply for domestic production and consumption, especially during the last months of 2022 and early 2023, eventually keeping national food and energy security intact,” Dung added.

Dung, however, expressed concern over the slow public fund disbursement progress at 27.86% of the plan as of June 30, lower than the 29.02% recorded in the same period of last year. Of the total, 39 out of 51 ministries and ministerial-level agencies, and six out of 63 provinces/cities have posted a disbursement rate below 20% of the plan.