The Hanoitimes - Vietnam’s current development level is equivalent to that of South Korea 40 years ago, and Malaysia 20 years ago, therefore, the road ahead is very challenging, said the minister of planning and investment.
Vietnam was one of the fastest growing economies in the world in 2018 with a decade-high GDP growth of 7.08%, however, it still ranked 136th out of 188 countries and territories in terms of GDP per capita, according to Nguyen Chi Dung, minister of Planning and Investment.
Vietnam’s current development level is equivalent to that of South Korea 40 years ago, and Malaysia 20 years ago, therefore, the road ahead is very challenging, Dung said in early February.
Reflecting on Vietnam’s economic performance in 2018, Deputy Prime Minister Vuong Dinh Hue said that the economy has been on positive trend, thanks to significant improvements in productivity, growth quality and national competitiveness.
In 2016, it would take 2.94% of credit growth rate for each one percentage point of GDP growth, while in 2017 the percentage reduced to 2.68%.
Vietnam’s credit growth rate in 2018 was estimated at 14% and the GDP growth rate of 7.08%, indicating a 2.1% of credit growth rate for a 1% of GDP growth, Hue stressed.
In terms of productivity, Vietnam has been one of countries with highest productivity growth in ASEAN. In 2018, the economy’s labor productivity reached VND102 million (US$4,512) per worker, up US$346 or 6% year-on-year.
Vietnam has participated in 12 free trade agreements (FTAs) with utilization rate of 35% and the openness level increasing from 120% of GDP to 200% over the last 10 years. Under this circumstance, Vietnam is considered vulnerable and sensitive to external shocks, especially the ongoing US-China trade friction, according to an expert at SSI Securities Corporation (SSI).
Going forward, Vietnam would need to take advantage of foreign trade, while bolstering the internal strength for sustainable development, said the expert.
Vietnam, on a positive note, could benefit from the trade war thanks to the relocation of factories and investment flow from China. However, Vietnam could face the risk of Chinese goods flooding the domestic market, in turn putting pressure on local enterprises.