Economist Nguyen Duc Thanh said that in a more “natural” scenario, growth for 2017 would be expected at 6.37% and inflation at estimated at only 2.35%.
These forecasts were made in a report on Vietnam’s annual economic situation produced by the Vietnam Institute for Economic and Policy Research (VEPR) under the National University of Vietnam.
The report focuses on issues related to institutional reforms needed to build a state that facilitates business activity, especially as Vietnam is facing slow growth and stagnation in productivity.
According to the report’s research group, as Vietnam is seeking to deepen international economic integration, institutional reform has emerged as one of the most urgent needs in order to attract foreign investment.
The 2017 report also highlights the rise of the middle class and policy shift in Vietnam.
Analysis shows that the growth of Vietnam’s middle class is mainly driven by the labour shift from the agricultural sector to the non-agriculture and formal sectors.
Experience from many countries suggests that the middle class, with a higher standard of living, will contribute to macrostability and economic growth in the future, helping to narrow the gap between the rich and poor.
The VEPR’s report also provides a general assessment of Vietnam’s economy in 2016, which continued to expose its vulnerabilities to external shocks and shows that the agricultural sector was severely affected by natural disasters and the Formosa incident.
Experts concluded that although Vietnam’s economy recovered in the latter half of 2016, growth only reached 6.21%, lower than the 6.68% rate recorded in 2015 and the government target of 6.3%.
