Supporting Viet Nam’s Innovation Efforts to Improve Quality of Growth

On January 12, the report on "Viet Nam's Economy in 2022 and Prospects for 2023" was launched in a workshop in Hanoi, featuring Viet Nam’s macroeconomic developments in 2022 and outlook for 2023, and recommendations on economic reforms and policies in 2023. This is part of the Macroeconomic Reforms/Green Growth Programme, commissioned by German Federal Ministry for Economic Cooperation and Development (BMZ) and implemented by GIZ in collaboration with Central Institute for Economic Management (CIEM) of Viet Nam. .

In her opening remarks, Dr. Tran Thi Hong Minh, Director of CIEM affirmed: “2022 has witnessed a series of important moves by key economies, paving the way for a series of new trends with far-reaching effects to the world economy. Global trade keeps increasing momentum compared to 2021. However, trade growth slowed down in the second half of 2022 and is expected to be more negatively affected in 2023 due to lingering geopolitical tensions and trends.  Although there have been interest rate hikes to deal with inflationary pressures, there is the possibility of further raising interest rates in the near future.”

According to CIEM Director, international economic integration has made positive changes, despite facing many challenges. Overcoming difficulties in the discussion process, Southeast Asia has achieved great success in organising the ASEAN, G20 and APEC Summits. The RCEP Agreement has been in effect since the beginning of 2022 and has initially helped link member economies to the export recovery momentum in the region. The CPTPP Agreement continues to receive the attention of many economies. The first round of negotiations of the Indo-Pacific Economic Framework (IPEF) took place in December 2022.

The report offers two scenarios to update Vietnam's economic forecast in 2023. Accordingly, economic growth in 2023 is forecast to reach 6.47% in Scenario 1, and 6.83% in Scenario 2. Full-year exports are forecast to increase by 7.21% in Scenario 1 and by 8.43% in Scenario 2. Trade surplus is forecast at USD 5.64 billion and USD 8.15 billion, respectively. Average inflation in 2023 is forecast at 4.08% and 3.69%, respectively.

In the context of facing the problem of slowing economic growth in the long term, Vietnam is also looking for new growth drivers, including the development of the digital economy. The Vietnamese government has implemented powerful solutions to support the development of the digital economy as well as digitalisation in public service delivery. Efforts to promote paperless trade have also emerged, most notably the United Nations Framework Agreement on the Facilitation of Cross-Border Paperless Trade in Asia and the Pacific (CPTA). ASEAN Member States have also promoted the development of the ASEAN Single Window, and are considering/attempting to cooperate more broadly, such as in the CPTA.

Speaking at the workshop, Mr. Dennis Quennet, Director of Macroeconomic Reforms/Green Growth Programme, remarked: “In order to create momentum for growth in 2023, Viet Nam needs to review its achievements, re-evaluate the quality of growth to make appropriate adjustments. The report released today will provide the state agencies with information they need to support the process of economic growth policy planning in the coming years."

The report re-affirms that policy priorities need to continue to focus on improving the micro-economic foundation and renewing the economic institutional system towards more environmentally friendly and innovative growth, which is highly adaptive to volatile international economic environment.