On August 24, in Hanoi, the World Bank released the report "Review of Vietnam's economic situation" published in August 2021. According to the report, Vietnam's GDP is expected to grow about 4.8% for the whole year of 2021.
This forecast is two percentage points lower than the forecast released by the World Bank Group in December 2020, taking into account the negative impact of the current COVID-19 outbreak on economic activities.
According to the report, in July, retail sales fell 19.8% year-on-year, the biggest drop since April 2020, while the Purchasing Power Index (PMI) also dropped significantly.
Regarding the external economy, the balance of trade in goods has turned into a deficit in the past few months, while foreign investors are somewhat cautious. The disruption of supply chains and industrial parks due to the widespread re-emergence of the COVID-19 epidemic seems to have forced exporters to temporarily close factories or suspend production.
“Will Vietnam's economy recover in the second half of 2021? It depends on the outcome of the current COVID-19 outbreak control, vaccine deployment effectiveness, and the effectiveness of fiscal measures to support affected businesses and households and to stimulate recovery. While downside risks have increased, Vietnam's economic fundamentals remain solid and the economy could return to pre-pandemic GDP growth rates of between 6.5 and 7% from 2022 onwards”. - according to Mr. Rahul Kitchlu, Acting Country Director of the World Bank in Vietnam.
The report recommends that authorities address the social consequences of the COVID-19 crisis by improving the depth and effectiveness of social protection programs. Authorities at all levels also need to be alert to increased risks in the financial sector, particularly in regards to bad debt. Fiscal policy also needs more attention because policymakers need to find a balance between the need to support economic recovery and the need to maintain public debt at a sustainable level.
In addition to an analysis of recent economic trends, this period's publication under the title "Digitalized Vietnam - The Road to the Future" delves into what Vietnam needs to do to achieve its ambitions of becoming a future. into one of the most advanced digital economies in the world. The COVID-19 crisis has accelerated the digital transformation of the domestic economy as more and more businesses in Vietnam provide online services. The government is also increasing the digitization of its procedures and databases.
The report said that like most countries in the world, whether or not Vietnam becomes the world's factory for digital technology will not depend much on its ability to create technological breakthroughs but is determined by the decision. determined by its ability to make the most of digital technologies developed in other countries.
In addition to modern infrastructure, three solutions are proposed to build the country's digital capacity with the Government playing a central role. Accordingly, policy makers need to encourage businesses and workers to acquire the right skills to take advantage of the digital transformation process; fostering innovation capacity of enterprises through competition; and financial support for startups and local talent, while promoting access, quality and security of information. Those three policy directions require the Government to intervene skillfully and closely coordinate with the private sector in the direction of full transparency to avoid being abused by interest groups both in the public and private sectors./ .
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