Vietnam identifies successful Covid-19 fight as key to ensure economic growth

The foremost and key task for Vietnam at the moment is to mobilize all resources to aid the Covid-19 fight, which should lay a solid foundation for economic recovery.

Production of stationery at Hong Ha company(Long Bien district). Photo:Chien Cong.

“In the meantime, the government should continue boosting public investment,” stated the Ministry of Planning and Investment (MPI) in a report, noting such a move would help stimulate domestic consumption and create jobs.

Economist Vo Tri Thanh expected exports to remain as a growth driver for Vietnam this year, especially as the country recorded an all-time high trade surplus of over US$19 billion in 2020.

In the past year, Vietnam recorded 31 groups of export staples with turnover of over US$1 billion, five over US$10 billion and one exceeding US$60 billion.

“Positive performance of trade was mainly thanks to the presence of trade deals that Vietnam is a part of,” Thanh said.

“In the future, both next-generation free trade agreements (EVFTA, UKVFTA, CPTPP) and existing ones would be a decisive factor for Vietnam to overcome negative impacts from the Covid-19 pandemic,” added Thanh.

 Thanh expected provincial governments to continue boosting trade promotion, diversifying export markets and addressing bottlenecks restricting the country’s exports.

Along with exports, domestic consumption stays key for Vietnam’s economic recovery, Thanh suggested, saying the government should provide more supportive measures for local retailers to expand distribution networks and revise operational models in a fast-changing business environment.

Pham Xuan Hoe, deputy director general of the Banking Strategy Institute at the State Bank of Vietnam, said Vietnam’s consumer finance market remains huge potential for development.

According to Hoe, in many countries, credit outstanding balance accounts for 40% of total outstanding loan, as such, the market could further expand by VND1,500-2,000 trillion (US$65.2-87 billion).

Former Director of the Market Price Research Institute under the Ministry of Finance Ngo Tri Long said public investment is also a major factor to support growth in 2021.

This year, the government plans to allocate VND477.3 trillion (US$20.7 billion) for public investment, up 1.4% against the previous year.

“It is vital for Vietnam to speed up the implementation progress of public projects, especially priority ones,” Long suggested.

Economist Can Van Luc also noted the necessity to ensure efficient implementation of government’s supporting programs for people and enterprises affected by the Covid-19 pandemic, focusing on fiscal measures of freezing and waiving of fees and taxes.

“Government should suggest solutions to help enterprises better access credit and more direct support for those affected by the pandemic,” he stated.

Sharing Luc’s view, Director of Rohm and Hass Vietnam Nguyen Hoai Son said the company is under pressure to change operation method towards online amid Covid-19 outbreak.

Director of Garment 10 company Than Duc Viet added most companies are struggling with keeping their businesses running at the moment.

“A worse pandemic situation would put the company’s operation at risk,” he added.