Vietnam NA set GDP growth target of 6-6.5% for 2022

The National Assembly (NA) on November 12 adopted a resolution on socio-economic development for 2022 with an endorsement rate of 94.59%.

Overview of the NA meeting. Source: quochoi.vn

Referring to concerns that such targets could be difficult to realize, Vu Hong Thanh, chairman of the NA Economic Committee, said the figures are set based on the assessment of both domestic and international situations.

In addition, Thanh added the growth target comes from a low-base growth in 2021, estimated at around 2%, and is in line with Vietnam’s five-year socio-economic development targets.

“The GDP growth of 6-6.5% shows the Government’s high determination and also remains in harmonization with other targets laid down for 2022,” Thanh added.

The NA’s resolution also sets the GDP per capita at US$3,900; the proportion of the manufacturing and processing sector at 25.5-25.8% of the GDP; the growth of consumer price index (CPI) at 4%; and average productivity growth of 5.5%.

“All key indicators have been considered thoroughly,” Thanh said.

Under the resolution, the NA urged the Government to ensure stable macro-economic fundamentals, while taking steps to control inflation.

The Government is expected to manage monetary and fiscal policies in a flexible manner to support economic recovery and smooth movement of goods, connecting supply-demand in the labor market, promoting exports and domestic consumption.

The NA asked Government agencies to further lower lending rates and control bad debts to maintain the liquidity of the banking sector.

Vietnam’s GDP growth in the first nine months of 2021 is estimated at 1.42%, lower than the 2.12% expansion rate recorded in the same period last year. This came from a contraction of 6.17% in the third quarter, an all-time low growth since the country first released its quarterly GDP data in 2000.

1.5 million enterprises in 2021-2025

On the same day, 92.18% of the NA Deputies approved a resolution on restructuring the economy for the 2021-2025 period.

The resolution expects the productivity to expand by 6.5% per year, while science, technology, and innovation would have greater impacts on economic growth.

“Vietnam would further narrow its national competitiveness with the ASEAN-4, especially in terms of institutional capability, infrastructure, and human resources,” noted the resolution.

Meanwhile, the state budget deficit should be around 3.7% of the GDP, and social investment capital around 32-34% of the GDP.

Other key indicators include the bad debt ratio among the banking sector at below 3%, the capitalization of the securities market of at least 85% of the GDP, the outstanding loans of the corporate bond market at 20%.

Vietnam is set to have around 1.5 million enterprises by 2025, of which around 60-70,000 are of medium and large sizes.

The contribution of the private sector to the GDP is expected to be around 55% and the digital economy of 20% of the economy.

The resolution set out key solutions to restructure the economy, including the restructuring of public investment, state budget, and credit institutions; promoting different types of markets for greater utilization of resources; nurturing the business community and strengthening the linkage between enterprises from the public, private and foreign-invested sectors; developing urban economy and provincial linkage to realize the potential of major economic hubs and urban cities; restructuring economic sectors towards green and sustainable development.