NA approves 6.5-7% GDP growth target for next five years

Vietnamese policymakers set a GDP growth target of 6.5-7% for the next five years, marking a GDP per capita of US$4,700-5,000 by 2025.

This is one of the key economic indicators of the Government’s five-year socio-economic plan for the 2021-2025 period, which was approved by the National Assembly (NA) with an endorsement of 475 or 95.59% deputies present on July 27.

Overview of the NA hearing. Source: quochoi.vn

Among key economic indicators, Vietnam expects to keep an average GDP growth of 6.5-7% for the period, which would translate into a GDP per capita of US$4,700-5,000 by 2025.

Manufacturing and processing, a key driving force for growth, is set to make up 25% of the GDP, and the digital economy would represent 20%.

The plan also targets an average productivity growth of 6.5% per year and a budget deficit of 3.7% of the GDP for the five-year period.

Chairman of the NA’s Committee for Economic Affairs Vu Hong Thanh noted despite severe impacts from natural disasters and diseases, especially the Covid-19 pandemic, the Vietnamese economy has expanded significantly in both scale and competitiveness.

Chairman of the NA’s Committee for Economic Affairs Vu Hong Thanh.

“A quick recovery from the pandemic is a top priority for the government in the first year of the five-year term, which is expected to lay the foundation for further breakthroughs in subsequent years,” Thanh said.

Thanh stressed the necessity for Vietnam to pursue a universal vaccination strategy to realize the goal of achieving herd immunity by late 2021 and early 2022.

Allocating $125 billion for public investment

At a hearing on the same day, Minister of Planning and Investment Nguyen Chi Dung said the government targets to allocate VND2,870 trillion ($125 billion) for public investment in the 2021-2025 period.

Minister of Planning and Investment Nguyen Chi Dung.

“Such amount would be used for around 5,000 public projects, less than half of the number in the last five years,” he said, noting the average funding amount for each project is estimated at VND210 billion ($9.12 million), a 2.4-fold increase against the 2016-2020 period.

According to Dung, the main goal of the public investment plan is to complete large-scale projects of national priority to form a comprehensive socio-economic infrastructure system that would help Vietnam better adapt to climate change and embark on the digital transformation process.

Deputy Duong Minh Anh from Hanoi.

Discussing the plan, Deputy Duong Minh Anh from Hanoi said only 1.12% of the public funds set to be allocated for culture, information, and 2.52% for education and vocational training are inadequate.

“Culture should be seen as a component of the economy, in this regard, investment in culture would not only preserve traditional cultural values but also generate steady income for localities,” Anh said.

Deputy Nguyen Tuan Anh from Long An province also called for a greater amount for science and technology development, instead of the current 2% rate.

“In light of the current Covid-19 outbreak and future pandemics, Vietnam should focus on developing solutions against dangerous diseases, with the immediate tasks being vaccine development against Covid-19,” Anh said.

Deputy Vu Thi Luu Mai from Hanoi.

“A national research center for vaccine development should be considered as a long-term plan,” he continued.

On solutions to improve the efficiency of public projects, Deputy Tran Van Tien from Vinh Phuc Province said it is essential for Vietnam to perfect a legal framework in public investment and promote the public-private partnership (PPP) model.

Deputy Vu Thi Luu Mai from Hanoi called for greater responsibilities of government agencies in managing state budgets in the interests of the nation and people.