On the eve of the lunar new year in 2021, Deputy Minister of Planning and Investment Tran Quoc Phuong spokewith Customs News about economic growth in 2021.

Deputy Minister of Planning and Investment Tran Quoc Phuong

The Government sets the 2021 economic growth target of 6.5%.How do you view this target in the context of forecasting that many economies in the world will continue to be in decline?

Deputy Minister Tran Quoc Phuong:

The Resolution on the Socio-Economic Development Plan of the National Assembly sets the GDP growth target of about 6% by 2021, inflation of about 4%, and 10 other socio-economic indicators. These indicators are built on the basis of calculating and balancing resources associated with the forecasted context for the year 2021, especially the situation of Covid-19 in the country and the world.

Although achieving this goal is a huge challenge, with high political determination, the Government sets a target to strive in operating the GDP by 2021 by at least 0.5%, to 6.5% and set higher determination for other socio-economic indicators.

The growth target in 2021 is set in the context of uncertain and unpredictable developments, the opportunity has been forecast but is not yet sure. If the world can control the Covid-19 pandemic in 2021, surely tourism will spike after a long time of being restrained.

However, at this point we are also unsureabout the strong resilience of the tourism industry. In addition, the actual preventive effect of the Covid-19 vaccine and its coverage due to the relatively expensive price of vaccines for developing countries is also unknown. The question therefore arises as to whether this qualifies for countries to completely remove the travel restriction conditions.

However, it must be affirmed, in challenges we still have good opportunities, if they can be utilized and turned into motivation. With the foundations and results that we have worked hard to achieve in 2020 and the clear visible dynamics, the growth target has been carefully considered and calculated by the Government.

With the expected growth target, how do you comment on the ability to attract investment capital flows?

Deputy Minister Tran Quoc Phuong:

Foreign investment in general is likely to increase in 2021. The reason is that the Covid-19 pandemic is better controlled, some countries already have vaccines, travelcan also be open much more than in 2020, helping to create favorable conditions for investors and businesses to implement investment plans.

Even in 2020, although it is very difficult due to the prolonged effects of the pandemic leading to a lot of restrictions on travel between countries, the current disbursement of investment capital still increased, showing the confidence of investors.

However, it is also important to realize that there will be a breakthrough in attracting capital flows in the coming year, but notuntil effective control of the pandemic.

In 2020, public investment will play a very important role in boosting GDP growth. What isthe role of public investment be in promoting economic growth this year, sir?

Deputy Minister Tran Quoc Phuong:

We all know that the formula for GDP has three factors including agriculture, industry and services. All three of these factors contribute to growth, so results are not based on a single driver.

Particularly for 2020, it can be confirmed that public investment is a positive driver for GDP growth, but not the only one.

By 2020, total social investment will account for 34% of GDP and public investment accounts for 25% of total social investment, which means that it will account for about 6-7% of GDP. This figure does not include the spillover effect of public investment on GDP.

In terms of results, the disbursement speed for public investment is as fast and strong as in 2020. It is estimated that the disbursement rate to December 31, 2020 will reach 82.8% of the plan assigned by the Prime Minister.

By the end of January, the end of the annual budget year, the disbursement rate may increase by 10%. This is the year with the highest disbursement rate in the 2016-2020 period.

Entering 2021, a number of new provisions of the Law on Public Investment are being applied, forcing localities, ministries and branches to better disburse, if they do not want to be deducted.

In addition, in terms of disbursement deadline, 2021 is the year when the 1-year disbursement policy begins. The capital cut is not desirable, so it will force better disbursement, and at the same time requires more precise and careful planning. With the new regulations, it is expected that the disbursement of public investment in 2021 will be better than in 2020, thereby continuing to make an important contribution to the growth momentum.

Entering 2021, what are the main growth drivers, sir?

Deputy Minister Tran Quoc Phuong:

Entering 2021, our country's economy is forecasted to continue to have favorable conditions, that is, production and business are on a clear recovery, proving that industrial production grows again with double digits, agriculture maintaining stability and high added value, services can be better, especially the flourishing digital services.

The export sector has more expectations for a new FTA with the UK, in addition to the EVFTA and other bilateral and multilateral trade agreements.

In terms of exports, this is a fairly accurate measure of the health of a production, as exports are its consequence. By the end of 2020, exports maintaining a positive growth rate are a positive driver for GDP growth and continue to keep momentum in 2021.

Another factor is the very good public investment disbursement in 2020. This will be a spillover factor that will strongly promote growth in the last months of the year and create momentum for 2021. With those factors, along with disbursement of public investment beingpromoted, economic growth is expected to achieve the set target.

Of course, attention must still be paid to the factors that inhibit growth, namely the complex evolution of the Covid-19 pandemic, trade tensions and climate change.

Thank you!