Vietnam seeks to stabilize economy amid global downturn: PM

Chinh’s assertion came as he presided over a Monday conference on maintaining macroeconomic stability, managing inflation, stimulating growth and ensuring a balanced economy.

He noted that the global geopolitical environment has changed dramatically in the last months, fluctuating fast and in complicated ways. The Russian-Ukrainian tension was far from abating. These factors have both short-term and long-term implications for the global economy and Vietnam.

Amid this challenging time, Vietnam will not sit and wait but actively find ways to ensure that macroeconomic and development goals are met, the PM stressed.

Chinh said that Vietnam has maintained macroeconomic stability, particularly in light of instabilities in several major economies, risks and recession. Inflation was under control and capitalization and monetary policies adequate for the situation.

Prime Minister Pham Minh Chinh delivers a speech at an economic conference on September 12, 2022. Photo courtesy of Vietnam Government Portal

According to the Ministry of Planning and Investment, Vietnam was able to maintain market stability in the first eight months with budget revenues increasing by more than 19% year-on-year.

Vietnam’s trade surplus rose 15.5% year-on-year to approximately $500 billion during this period. Its labor market rebounded following the Covid outbreak and GDP growth was likely to exceed 7% in the third quarter if no major (adverse) developments occurred.

“Full-year growth is predicted to exceed the target of 6-6.5% and if additional efforts are made, it is likely to be even higher,” Nguyen Chi Dung, Minister of Planning and Investment, said at the conference.

International organizations have given Vietnam’s growth forecast high marks.

Most recently, credit rating agency Moody’s has upgraded Vietnam’s rating from Ba3 to Ba2 thanks to strong manufacturing sector and export growth. The agency changed its outlook for Vietnam from positive to stable.

Vietnam’s Covid-19 recovery index was second in the world, up 12 places, according to the Nikkei Covid-19 Recovery Index released in July.

Other international organizations, including the World Bank (WB) and the International Monetary Fund (IMF), have all upgraded their projections for and valuation of Vietnam’s economic growth.

Francois Painchaud, the IMF’s representative in Vietnam, said that the country was recovering, inflation under control and the exchange rate stable.

“The State Bank of Vietnam has made measures to lower inflation, preserve macro stability, and is doing extremely well,” he said, adding that “financial circumstances are also rigorously monitored.”

The IMF has raised its economic growth forecast for Vietnam this year from 6% to 7%, which is the only significant upward revision among major Asian economies.

Andrea Copppla, WB’s lead country economist and program leader for equitable growth, finance and institutions in Vietnam, also assessed that the country was recovering, the inflation rate well controlled, and exchange rate kept stable.