What factors affect Vietnam’s economy in 2023

With a fairly high growth foundation in 2022, Vietnam’s economic growth in 2023 will slow down…

In an exchange with a reporter of Customs Magazine, Dr. Tran Toan Thang, Head of the Industry and Enterprise Economics Department (Ministry of Planning and Investment), added that up to now, many macroeconomic indicators of Vietnam’s economy show a strong economic recovery trend. strong. However, the economy is still facing many new and emerging adverse factors, risks, and challenges. Some of the biggest current risks that could change the growth trend and resilience of Vietnam’s economy in 2022 and the impact that can last into 2023 are pointed out: The war in Ukraine lasts and the energy crisis in the European Union (EU); “Zero Covid” policy and the growth slowdown in China; disruption of global supply chains; US interest rate hike policy and other major currencies reaction; energy crisis in the EU and especially the spiral of inflation and the risk of recession in major economies.

The decline of major partner economies is expected to negatively affect Vietnam’s economy through impacts on trade, exchange rate, and competitiveness. The US, EU, and China are Vietnam’s largest export partners and export markets, so the economic slowdown of these countries will lead to a decrease in Vietnam’s exports and imports. A decrease in US consumption will put deflationary pressure on the US economy, thereby causing the dollar to depreciate. This indirectly affects the competitiveness of Vietnam’s exports through exchange rate effects.

It is forecasted that Vietnam will still try to maintain the target of stabilizing interest rates and exchange rates, keeping interest rates low to support growth. Regarding fiscal policy, the investment component of the Support Program - amounting to about 1.6% of GDP - is expected to be implemented mainly from 2023 onwards. However, with a fairly high growth foundation in 2022, Vietnam’s economic growth in 2023 will slow down, gradually returning to its pre-Covid-19 state, as the domestic demand rebound may not be as strong as last year. 2022. Rising raw material prices begin to translate more clearly into production costs. Import and export may increase more slowly than in 2022, due to the prolonged difficult situation of Vietnam’s main export markets. Foreign investment attraction is forecast to remain low, due to increased global economic risks.

(Collection source)