Vietnam's economy showing signs of recovery: IMF official

IMF Regional Resident Representative Francois Painchaud addresses the Vietnam Economic Forum in Hanoi on December 5.

Vietnam is showing signs of socio-economic recovery though the COVID-19 pandemic remains complex, according to Francois Painchaud, Regional Resident Representative of the International Monetary Fund (IMF) in the country.

Speaking at the Vietnam Economic Forum 2021 on December 5, Painchaud said the this started in the fourth quarter, and the country can achieve a GDP growth rate of 2.5 percent this year and 6.6 percent in 2022.

He underlined the importance of enhancing the healthcare capacity to economic recovery, noting that timely fiscal and monetary policies for right groups and tools of restructuring to support development in the long term can help minimise the pandemic’s impact.

The official held that the size of fiscal measures in developed economies can be applied to other countries, including Vietnam. More importantly, policy support needs to be based on the pandemic’s developments as well as the economic development process in each country. Border closure and social distancing measures should be accompanied by policy support for essential sectors.

Temporary but timely assistance measures must be provided for the worst-hit households or enterprises when a country gradually moves towards reopening, he noted.

The pandemic has considerably affected employment, especially in the informal sector, and small- and medium-sized enterprises (SMEs), but Vietnam can still realise its aspirations, provided that more drastic reforms are made, according to Painchaud.

Addressing the forum, Bui Quang Tuan, Director of the Vietnam Institute of Economics, also pointed out several positive signs indicating growth recovery in the country.

However, he also noted that businesses are facing a serious shortage of capital or encountering obstacles to credit access.

Tuan suggested aid packages that are big and timely enough and “directly injecting vitality into the economy” be issued to bolster growth.

Proposing several measures for economic recovery and sustainable development, he said the monetary policy must enable interest rate reduction, the fiscal policy focus on spending on health care and social housing, attention be paid to developing SMEs, public investment be stepped up, and digital transformation and digital economy be facilitated./.