Vietnam's annual growth to reach 6.5% during next decade: Fitch Solutions

Thursday, 2021-03-11 18:14:38
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Vietnam imports hi-tech machinery to serve production. (Photo: VNA)
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NDO/VNA – Vietnam’s economy will grow 6.5% each year over the course of the next 10 years as the Government diversifies export markets and improves infrastructure, according to market researchers Fitch Solutions.

Although its forecast is lower than the Government’s 6.5-7% growth target for the 2021-2025 period, Fitch said newly-signed free trade agreements will help the country expand market access while avoiding any overdependence on a single trade partner.

Vietnam plans to prioritise the importation of machinery and high-tech equipment, it went on, adding that this requires an increase in skill levels, which may only improve slowly over the next decade.

Regarding infrastructure development, Vietnam plans to complete the eastern cluster of the North-South Expressway, the first phase of Long Thanh International Airport, and over 1,700 km of coastal roads from the northern province of Quang Ninh to the southernmost province of Ca Mau.

Its targets posting a budget deficit of 3.7% of GDP, with public debt at 47.5% of GDP in the next five years – less than the 65% limit.

Fitch believes this is feasible given the country’s economic potential.

Due to the impact of COVID-19, Vietnam’s GDP grew 2.9% last year but it was one of only a few countries to post positive growth.

Meanwhile, economists from the Bank of America forecast economic growth of 9.3% for Vietnam in 2021 – substantially higher than the 6.8% projected by the World Bank.