Vietnam may achieve growth of 6% in 2022, 7.2% in 2023: IMF

Inflation is expected to edge up to 3.9 per cent by end-2022. Growth risks are tilted to the downside while inflation risks are tilted to the upside, she said.

“The recovery is projected to strengthen, supported by the recently-approved Programme for Recovery and Development (PRD)….The conflict in Ukraine is expected to have a moderate impact on the pace of the recovery and inflation,” she said.

The recovery has been uneven so far, with the service sector still lagging, while financial risks and inequality have likely risen, she said.

Policy priorities should be to entrench the recovery, preserve macroeconomic stability, and promote inclusive growth. The size and composition of policy support should be proactively adjusted to the pace of recovery and clearly communicated and implemented to reduce uncertainty, she said.

Decisive structural reforms are needed to address longstanding challenges related to the business environment, especially for small and medium enterprises, labour quality and skill mismatches, and governance, she said in a statement.

“The outlook is subject to significant risks. Growth risks are tilted to the downside while inflation risks are tilted to the upside. The most immediate risks include the intensification of geopolitical tensions and a slowdown in China. Other risks include a tightening of global financial conditions and developments in the domestic real estate and corporate bond markets,” she said.

“Revenue mobilization should be enhanced to finance a permanent strengthening of social security, build resilience to climate change and address pressures from population aging. The team welcomes Vietnam’s pledge to reach net-zero emission by 2050. It will be essential to transform the authorities’ ambitious climate adaption and mitigation plans into action including via better integration with the budget,” she added.

Fibre2Fashion News Desk (DS)