OECD forecasts that Vietnam’s economy will grow by 6.5% in 2023.08/05/2023
The Organization for Economic Cooperation and Development (OECD) forecasts that Vietnam’s economy will grow steadily, with Gross Domestic Product (GDP) reaching 6.5% in 2023 and 6.6% in 2024.
On the morning of April 26th, in Hanoi, the Ministry of Planning and Investment, in coordination with the Organization for Economic Cooperation and Development (OECD) and the Asian Development Bank (ADB), as well as various ministries and agencies, held a ceremony to announce the “OECD Economic Report: Vietnam 2023.” This is the first report on Vietnam’s economy conducted by OECD and ADB.
During the announcement of the report, Dr. Koen Vincent, a member of the OECD Economics Department, stated that Vietnam has made significant economic progress over the past decades and maintained a high growth rate. The deep and continuous reforms since the late 1980s have been the key to the success of the Vietnamese economy. Vietnam’s economy has also demonstrated its ability to recover from shocks, including the COVID-19 pandemic. During this pandemic period, OECD forecasts that Vietnam’s economy will grow steadily, with Gross Domestic Product (GDP) reaching 6.5% in 2023 and 6.6% in 2024.
However, according to Dr. Koen Vincent, due to the openness of the economy, Vietnam is vulnerable to political instability and supply chain disruption risks. In addition, in the short term, external conditions threaten the recovery of the economy. Supply chain disruptions may continue to weigh on global trade, and inflation may increase worldwide, which could put pressure on Vietnam’s exchange rate.
Given these significant challenges ahead, OECD believes that Vietnam needs to make further efforts to promote structural reform to strengthen market forces. Furthermore, to reduce dependence on fossil fuels, Vietnam should stop investing in new coal mines and accelerate the implementation of the carbon market. Since these reforms will require additional financial resources, the tax base should be expanded to increase government revenue.
The “OECD Economic Report: Vietnam 2023” provides three main messages. First, macroeconomic policies need to help enhance the economy’s resilience. In the short term, priority should be given to minimizing the impact of high energy prices through targeted support for vulnerable households, rather than implementing broader fiscal measures.
In the medium term, the report emphasizes the need to reinforce macroeconomic policy frameworks by improving fiscal sustainability through expanding the tax base. Additionally, Vietnam needs to strengthen its social protection system and reduce the size of the informal economy.
Moreover, Vietnam needs to further improve the business environment and facilitate the digital transformation process to maintain high economic growth after recovery. Finally, the report points out that to achieve the net zero emissions goal by 2050, Vietnam will need to maintain a high level of investment in renewable energy and pursue higher energy efficiency. This orientation can be realized through a comprehensive policy approach, giving priority to effective state and private investment, establishing favorable regulations, and creating mechanisms to better reflect carbon pricing.
During the ceremony, experts exchanged ideas and discussed macroeconomic stability, inflation control, laying the foundation for accelerated economic and social development, regulatory reform of commodity markets, promoting digital transformation and green recovery, and enhancing the independence and autonomy of the economy in the future.