CAN THO – Given global uncertainties, the driving force behind Vietnam’s economic growth is anticipated to switch from the export sector this year to the public investment field next year, said an economic expert.
Nguyen Xuan Thanh, an expert from the Fulbright School of Public Policy and Management, said that 2023 may be full of challenges as interest rates edge higher. This could lead to the U.S. and EU economies falling into recession, thereby affecting Vietnam’s exports.
In that context, the public investment sector is expected to help the local economy make headway, Thanh told a meeting of the Vietnam Chamber of Commerce and Industry – Can Tho branch (VCCI Can Tho) yesterday, July 19.
Thanks to rising public investment disbursement, industries such as construction and infrastructure development will help fuel economic growth, he added.
Earlier at the meeting, Thanh said Vietnam’s current key driver of growth is export-oriented manufacturing.
The country’s export revenue last year rose 19% year-on-year and the first half of this year saw export growth of 17.3%. The Mekong Delta recorded the highest export growth rate, at over 20%, backed by strong exports of aquatic products.
The Russia-Ukraine tension resulted in a suspension of Russia’s cod exports to the EU, so EU consumers have switched from cod to tra fish. This explains why the Mekong Delta exported US$1.4 billion worth of tra fish in the first half of 2022, up a staggering 83% year-on-year.
China’s zero-Covid strategy has forced many of its fishery processing facilities to suspend operations. Therefore, Vietnam’s exports of food and foodstuff, and aquatic products to the northern neighboring country have risen.
“If supply chains operate as normal as now, the Vietnamese export sector will become the key driver of economic growth in 2022,” Thanh said.
Speaking at the meeting, VCCI vice chairman Vo Tan Thanh forecast that Vietnam’s economy, especially the Mekong Delta, will experience multiple challenges in the near future, including the Covid pandemic showing new developments in the world, unexpected events such as the Russia-Ukraine war, escalating fuel prices, and inflation in many countries.
In Vietnam, credit tightening has made it more difficult for businesses to borrow from banks. Besides, rising material prices and labor shortages have caused many enterprises to struggle to maintain their operations.