Vietnam’s economic growth in 2020 driven by traditional sectorsMonday, February 17,2020
AsemconnectVietnam - Vietnam’s GDP increased 7.02% last year, marking the second consecutive year the economic growth rate has surpassed 7%. Economists say this will create momentum for this year’s growth, which will be primarily driven by traditional sectors.
Last year’s GDP growth rate of 7.02% was high compared to other Asian countries. Vietnam’s inflation rate, budget deficit, and foreign currency reserves all improved.
Nguyen Dinh Cung, former Director of the Central Institute for Economic Management (CIEM), said Vietnam's economy will be strengthened with the improvement of indexes of the budget deficit, foreign debt, money supply, foreign currency reserves, and exchange rates.
“Although 2020 is the final year of the 12th National Party Congress, the renewal of state-owned enterprises, and the reform of the business environment to boost the private sector will continue,” said Cung.
“In 2020, the private economic sector remains the driver of Vietnam’s economic growth and the disbursement of public investment will be improved. I believe Vietnam will continue to see a growth rate between 6.8 and 7%”, Cung added.
Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry, talked about potential fields for investment through 2030. He said opportunities will be given to sectors with traditional advantages.
According to Loc, “This year traditional sectors will continue to offer huge investment opportunities. These include the garment and textile, footwear, timber products, electronics, farm produce, seafood, retail, tourism, entertainment, education, healthcare, logistics, and support sectors. New opportunities will be found in the green economy, the creative economy, and the digital economy, together with smart urban development.”
Five additional sectors are predicted to see an economic boom this year: consumer goods, tourism and tourism-based industries, logistics, construction and construction materials, and agriculture and agricultural services.
In addition, what will drive Vietnam’s economic growth this year will be the domestic market, which has the purchasing power of 100 million people.
Nguyen Duc Hung Linh, Chief Economist and Research and Development Manager of the SSI Securities Corporation, said “Vietnam’s long-term growth still depends on making full use of its 100-million-people market, which still has great potential and gives us room to grow before expanding to foreign markets. The 100-million-people market is good not only for retail consumer goods, but also for arts, entertainment, and education. The market demand of these sectors is huge, but the service and quality of domestic businesses is still modest.”
Although Vietnam has built up a good foundation on which the economy can grow, more attention should be paid to addressing risks and uncertainties due to external factors and internal weaknesses. Institutional reform and removing obstacles in the business and investment environment should be high priorities.
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