According to Andrea Coppla, Chief Economist of the World Bank in Vietnam (WB), in the context of the world economy facing many disadvantages and declines, the Vietnamese economy recovered very quickly and was very impressive.
Mr. Andrea Coppla, World Bank Chief Economist in Vietnam WB: Vietnam’s economy recovered quickly and was impressive. VGP/Nhat Bac photo
On the afternoon of September 12, Prime Minister Pham Minh Chinh and Deputy Prime Minister Le Minh Khai chaired a conference on maintaining macroeconomic stability, controlling inflation, promoting growth and ensuring major balances of the economy in the current situation.
Speaking at the conference, Mr. Andrea Coppla, World Bank Chief Economist in Vietnam, said: In the current context, the growth of Vietnam’s leading economic partners will be slower. Inflation tends to increase in many major economies around the world. Many global supply chains have been disrupted, including energy supplies,…
However, over the past time, Vietnam’s economy has recovered very quickly and is very impressive. The representative of the World Bank said that the growth of the Vietnamese economy in the second and third quarters of 2022 is very good. The industry has also experienced tremendous growth.
However, looking to the future, the Vietnamese economy faces fundamental challenges. In particular, a slowdown in world economic growth will affect Vietnam’s economic growth and possibly affect the recovery of the domestic economy.
In addition, the factor of inflation, especially since the conflict between Russia and Ukraine took place, there are risks related to high prices, such as food prices, making production costs, labor costs are also affected and lead to adverse effects.
Need a sound fiscal policy
In order to actively respond to unfavorable external fluctuations, the WB representative said that Vietnam needs to balance between the policy of economic recovery and inflation control; proactive scenarios to cope with the change of the whole world economy.
Accordingly, Vietnam needs to have a sound fiscal policy to be able to handle public investments, and these public investments must be promoted more effectively.
In the short term, it is necessary to effectively use the packages to support growth recovery. Therefore, it is necessary to recovery the market and the demand of the domestic market. From there, it is possible to limit the negative impact of price increases.
If we can control inflation, the efficiency and potential of the economy is still below potential. Anyway, we still face the risk of such inflation. If we bring inflation to 4% above the expected level then we have to tighten interest rates and the State Bank of Vietnam has to do this.
Such financial and monetary policy decisions can guide the behavior of the market and therefore need very radical changes to be able to promote effective monetary policy. to improve the liquidity of the economy.
Firmly ensure the self-reliance of the national financial system
According to the representative of the WB, it is necessary to firmly ensure the self-reliance of the national finance; It is necessary to deal with bad debts and overdue debts of the economy so that all banks have to comply with the handling of bad debts.
Accordingly, it is necessary to strengthen the resilience of the banking industry. Therefore, banks must have a recovery strategy for themselves to be able to face the risks associated with bankruptcy.
The WB representative said that economic structural reform is very important to promote growth and make the economy more and more resilient. In parallel with promoting the effectiveness of fiscal policies, we must continue to pursue other development programs and social programs; improve the adaptive capacity and make the health and resilience of the Vietnamese economy higher and higher.
In addition, implementing a roadmap to reduce C02 emissions to zero can also help Vietnam strengthen its economy and enhance its competitiveness.
On the other hand, through improving the investment environment, Vietnamese policymakers also need to improve the capacity and quality of labor, the WB representative recommended.