Economy in 2018: “Don't rest on your laurels”

Production worker.

2018 recorded the highest GDP growth of the entire economy in the past 10 years, however our per capita income is still much lower than that of other countries in the region.

Not really a breakthrough

According to the 2018 socio-economic report of the General Statistics Office, Vietnam's economy recorded encouraging signs. The most notable of which was the GDP growth of 7.08% in 2018, the highest growth rate in the past 10 years.

In the general growth of the whole economy, the agriculture, forestry and fishery sector increased by 3.76%; the industry and construction sector increased by 8.85%; and the service sector increased by 7.03%.

2018 also recorded inflation being controlled below 4%, achieving the target set by the National Assembly.

"As the Party and State leaders have said, 'we should not be intoxicated with achievements, and should not rest on our laurels'" - Associate Professor, Dr. Ngo Tri Long said.

“As the Party and State leaders have said, ‘we should not be intoxicated with achievements, we should not rest on our laurels’, our economy last year still had many points that had not been achieved. Why, despite such a miracle, is Vietnam still lagging behind? Average income is still low, 2,587 USD/person, much lower than other countries in the region. That is something we must ponder,” said expert Ngo Tri Long.

Looking straight at what we failed to do in 2018, expert Can Van Luc also pointed out 3 remaining limitations.

Firstly, the process of economic restructuring is still slow, especially equitization and divestment of state-owned enterprises. In addition, the structure of the state budget is slow, the efficiency of public investment in Vietnam has not been improved, in which the story of disbursement of public investment capital still has many outstanding problems. We have found bottlenecks but cannot fix them immediately and it is very likely that this problem will continue to exist in 2019.

Second, in 2018, with the attention of the Government, the business environment has been greatly improved. However, the lack of serious implementation from the lower levels has made the improvement of the business environment still not good. Therefore, there is still a phenomenon of cutting down on business conditions that is not substantial.

Third, in 2018, Vietnam successfully integrated into the international economy with many international agreements signed, but businesses have not yet taken advantage of many integration opportunities for development.

Challenge 2019

Economist Can Van Luc.

Accordingly, global economic growth will slow down next year. This year, global GDP increased by 2.9%, but next year it will only reach 2.5%. If the US-China trade war continues to be tense, this figure will be even lower. This will affect our economy in the context of Vietnam's deep integration with the world and the region.

Regarding the target of controlling inflation at 4%, we must be very determined to be able to control it, because there is a lot of pressure to increase inflation next year. This expert analyzed that in 2019, world prices will continue to increase slightly, the US dollar may increase and the exchange rate will still be under a lot of pressure. In addition, domestically, the increase roadmap is also being considered in a number of areas.

To control inflation, Mr. Luc said we must do the following three things:

Firstly, Vietnam's monetary policy needs to closely monitor developments in the world's financial, monetary and geopolitical situations, in order to have appropriate response scenarios.

Second, coordinate monetary and fiscal policies well.

Third, flexible policy management, especially exchange rate policy.