Viet Nam’s economy to pick up pace over second half of 2023
VGP - Viet Nam’s economy will pick up pace over the second half of this year, and the following years, according to the World Bank (WB)’s latest economic update entitled “Making Public Investment Work for Growth”.
The launching ceremony of World Bank (WB)’s latest economic update entitled “Making Public Investment Work for Growth”, Ha Noi, August 10, 2023 - Photo:haiquanonline.com
The report forecasts a moderate growth of 4.7 percent for Viet Nam in 2023, gradually accelerating to 5.5percent in 2024 and 6 percent in 2025.
A proactive fiscal policy supporting short-term demand, removing barriers to the implementation of public investment, and addressing infrastructure constraints can help the economy achieve these targets and promote long-term growth, suggested the WB.
Viet Nam's economy is being tested by internal and external factors. To boost economic growth, the government can support aggregate demand through effective public investments, thereby creating jobs, and stimulating economic activity, said Carolyn Turk, World Bank Country Director for Viet Nam.
Beyond short-term support measures, the government should not lose sight of structural institutional reforms–including in the energy and banking sectors–as they are imperative for long-term growth, she recommended.
The report suggests policy options to get the economy back on track. Effectively implementing the 2023 investment budget can stimulate aggregate demand and economic growth.
On exports, the report suggests diversifying product offerings and export destinations to build medium-term resilience against external shocks.
At the same time, fiscal policy can play a stronger role in incentivizing green practices and consumption, ultimately contributing to environmental sustainability.
The report's special chapter studies Viet Nam's public investment management and how it can contribute to the goal of climbing the income ladder.
To harness the power of public investment, the report recommends that Viet Nam sustain its level of investment, improve the quality of the proposed project, and address deficiencies in public investment management and inter-governmental fiscal institutions./.
