In the last months of the year, there are still many risk factors and challenges amid the Covid-19 pandemic, along with that, the internal capacity of the economy is still low, heavily dependent on regions with high foreign investment capital.

Vietnam is the only country in the world that all three international credit rating agencies
(Moody's, S&P and Fitch) simultaneously raised its outlook to positive. Source: Internet.

GDP growth in 6 months is estimated at 5.8%

According to forecasts by the Ministry of Planning and Investment, GDP in the first six months of 2021 will reach nearly VND4 trillion, equivalent to a growth rate of about 5.8%, 1.39% lower than the 6-month growth target according to the updated scenario in the first quarter of 2021 (up 7.19%).

According to Minister of Planning and Investment Nguyen Chi Dung, the macro economy and major balances of the economy are forecasted to remain stable; inflation is under control; the money and foreign exchange markets were stable, credit structure shifted in a positive direction.

According to the forecast of the Ministry of Planning and Investment, the state budget revenue in six months is estimated at 55.5% of the estimate, up 10.9% over the same period in 2020, approximately the same as in 2019. State budget expenditure is estimated at 43% of the estimate; disbursement of public investment capital in the first six months of the year was estimated at 34.15% of the plan (the same period last year reached 34.85%).

Regarding economic growth, the Ministry of Planning and Investment said that the successful response, prevention and control of the Covid-19 pandemic will be an important factor, having a decisive role in macro stability and economic recovery in the last months of 2021.

In which, the driving force for economic growth in 2021 will come from the industry - construction sector and the service sector, especially the manufacturing and processing industry, increasing investment and commercial expansion.

However, the economic growth prospects in the last months of the year still have many risk factors and challenges amid the Covid-19 pandemic, the internal capacity of the economy is low, depending on the region having foreign investment capital; inflation is likely to increase, while risks of natural disasters, pandemics, people's lives and business activities are still rising.

Commenting on controlling inflation in 2021 in the last months of the year, as well as economic growth drivers, Deputy General Director of the General Statistics Office Nguyen Trung Tien, said that all levels should not be subjective in controlling inflation. To reduce inflationary pressure at the end of 2021 and sustainably control inflation in 2022, the authorities need to closely monitor the supply and demand movements and market prices of essential commodities.

At the same time, take the initiative in managing the prices of goods managed by the State at the right time with the right amount, closely monitoring the movements of world gasoline prices, using the petrol price stabilization fund reasonably to limit the price increase of this item to the general CPI.

"Observing the Government's experience in controlling inflation in recent years, I believe that the average CPI target of about 4% this year set by the National Assembly is achievable," said Deputy General Director Director of General Statistics Office Nguyen Trung Tien.

There are still many uncertain factors

According to Dr. Nguyen Dinh Cung, former director of the Central Institute for Economic Management (CIEM), in addition to the same effects as the previous three Covid-19 outbreaks, this outbreak also has other effects. This pandemic has upset production in some industrial parks in Bac Giang and Bac Ninh. In addition, industrial output decreased due to the cessation or reduction of production by some large enterprises, especially in processing and manufacturing enterprises. At the same time, the growth rate of export turnover, especially the export of manufactured products, may decrease and the trade deficit may return in the near future.

“Combining the old and new impacts of the four recent Covid-19 outbreaks, economic growth in the second quarter of 2021 and the first six months of the year will be significantly lower than expected,” said Nguyen Dinh Cung.

In the context of the fourth wave of the Covid-19 pandemic, there were some suggestions that monetary policy should be loosened to support growth. However, according to many experts, the easing of monetary policy is difficult to implement in the context of increasing inflation pressure when the prices of many raw materials such as gasoline, iron and steel, animal feed, continuously increase in recent times.

According to senior economist, Assoc. Prof. Dr. Dinh Trong Thinh, in order to achieve the planned targets in 2021, including the target of inflation, in the context that the world economy still has many complicated developments, it is necessary to take proactive, flexible, resolute and appropriate measures for the economy.

Besides efforts to stabilize the macro-economy, flexible monetary policy with many opening mechanisms and suitable interest rates, good control of inflation, good economic recovery and growth, factors to expect Vietnam to continue to be upgraded by international credit rating agencies, creating a premise to achieve better results.

Assoc. Dr. Ngo Tri Long also said that 2021 is still very difficult to predict because the world market is abnormal, especially the Covid-19 pandemic negatively affects the domestic economy and banking system. Therefore, the price management should continue to operate cautiously, flexibly and proactively. Fiscal policy should closely coordinate with monetary policy and other macroeconomic policies in order to control inflation according to the set target; at the same time, contributing to supporting and removing difficulties for production, business and people's lives affected by the Covid-19 pandemic.