The quality of growth has been improved with less reliance on mining and credit growth and is increasingly driven by science, technology and innovations.
In 2019 the total factor productivity (TFP) was estimated 46.11%, with labour productivity continuing to grow. The macroeconomy was solid and inflation was kept at low levels, creating the conditions to boost economic growth.
It is notable that more and more bright spots are appearing on the economic picture and across major economic sectors: industry and construction, services, and agriculture. The financial and monetary markets remained stable along with increases in foreign reserves. Economic restructuring was more substantive in addressing a number of weaknesses of the economy. The business environment continued improving and the start-up spirit kept spreading with the number of new enterprises and registered capital reaching an all-time high for the fifth consecutive year.
Experts said Vietnam is moving in a new trajectory, different from many regional economies, as inflation does not weigh on high growth and the economy is less susceptible to external risks despite greater trade openness.
The usual law that growth slows after five years of rapid expansion looks to be changing with the Vietnamese economy being expected to grow strongly and return to the orbit of high growth in 2020 and beyond. It is the result of the government’s consistent and synchronous economic management with the goal of increasing economic self-reliance during the 2016-2020 period.
Although optimistic about the prospects for 2020 and beyond, experts also issue warnings of the risks that Vietnam will have to face. They are the adverse impacts on Vietnam’s key export market as a result of trade tensions between major powers and global political instability. In the meantime, manufacturing - the main growth driver of Vietnam’s economy - has begun slowing down and recorded weak growth in the fourth quarter of 2019.
Determining 2020 as a highly significant year, the government has introduced a resolution with the aim of fine-tuning institutions, creating an equal, open and conducive business climate.
It is necessary to ensure macroeconomic stability, enhance labour productivity, step up economic restructuring, protect the environment, increase the quality of life, undertake administrative reform, fight corruption, strengthen national defence and promote the aspiration of transforming Vietnam into a strong and wealthy country.
For now, ministries, agencies and local authorities need to make serious efforts to implement the measures as outlined in the central government’s resolution in order to maintain political stability and foster sustainable socio-economic development.