(VOVWORLD) - Country Director of the Friedrich Naumann Foundational for Freedom(FNF) in Vietnam Andreas Stoffers said he expects Vietnam's economy to continue its growth track.
 Country Director of the Friedrich Naumann Foundation for Freedom in Vietnam Andreas Stoffers (Photo: laodong.vn) |
During a recent interview with Labor newspaper, Stoffers said Vietnam's economy grew 3.72% in the first half, which is lower than last year but still a positive figure amid the global economic downturn.
Average consumer price index (CPI) increased moderately by 3.12% year-on-year from January to July. The downward trend in average CPI growth over the months is a positive sign because it indicates that Vietnam is on track to achieve the inflation control target of below 4.5% set for 2023.
From January to July this year, Vietnam's economic growth was mainly driven by retails and services, which rose 10.4% annually. The industrial production index in July also saw an increase from earlier this year.
Attributing these positive results to the fiscal and monetary policies of the State Bank of Vietnam (SBV), Stoffers said the reduction in interest rates is stimulating credit demand and enhancing liquidity within the banking system and the economy, particularly in the credit sector. Alongside setting credit growth cap at 14% for this year, the SBV will issue necessary warnings.
Vietnam’s GDP growth will exceed 5% this year, he said. Apart from the contribution of FDI, additional momentum from increased public investment and personal consumption is needed.
Against headwinds such as the Russia-Ukraine conflict, difficulties in Vietnam’s partner countries, especially the European Union, slow recovery in various markets and the global inflation specter, Stoffers said a comprehensive set of solutions is required to both foster development and manage risks effectively.
There should be an improvement in the entire financial sector, such as the establishment of a financial center in Ho Chi Minh City in the medium term, he suggested.
But of equal importance is promoting cooperation between the public and the private sector to generate a collective strength, thus creating the opportunity to access various financial products and international markets, enabling the public to invest in diverse asset types, Stoffers added.
He also suggested promoting financial education to help people understand financial products and make careful investment decisions, as well as institutional improvement, especially in finance.
Stoffers said set targets could be facilitated by the Government support through expediting institutional reform, modernizing legal frameworks and coordinating policies. More importantly, Vietnam needs to address the weakness in decision-making process that currently exists in certain administrative sectors, he said.
There is also a need for promoting sustainability, the circular economy, digitizing administrative processes, and environmental protection. Boosting public investment while reducing inefficient structures, especially at State-owned enterprises, is also essential.
To stimulate investment and create liquidity, interest rates could be cautiously lowered further, with subsequent adjustments as the economy experiences significant recovery. Lastly, domestic consumption demand should also be bolstered, he added.