Bloomberg’s Most Read
Prime Minister Pham Minh Chinh, speaking at the opening of the autumn session of parliament on Wednesday, predicts that gross domestic product will rise next year in a range of 6% to 6.5%.
The annual speech to the National Assembly, which sets the economic direction for next year, comes as the government struggles to fix an economy hampered by strict anti-virus lockdowns, which are closing factories and crippling chains global supply.
“The country has faced increasing difficulties with the emergence of the delta variant” this year, which has challenged the resilience of its economy, Chinh said.
Chinh pledged more flexibility on the part of the authorities to help guide the recovery, ease supply chain bottlenecks and facilitate the flow of goods. He also said that regulators will be flexible in the management of monetary policy.
The ravages of the delta variant of Covid-19 sent GDP plunging 6.17% in the third quarter, the worst performance since the government started tracking the figure. This year’s economy is seen by policymakers growing by 2.5% to 3%, well below expectations of 6.5% set at the same event last year.
As restrictions ease and the country ramps up vaccinations, Chinh’s government is now tasked with restoring Vietnam’s reputation as a reliable global supplier of everything from Walmart Inc. furniture and Adidas AG sneakers to Samsung smartphones. Electronics Co ..
Authorities have imposed strict measures for months to contain the virus, ranging from ordering factories to shut down if they cannot provide sleeping arrangements for workers to banning residents of the Ho Chi National Mall. Minh-City to buy food.
The looser restrictions now, however, are creating new workforce challenges as thousands of workers return home, leaving electronics and clothing manufacturers with around half of their normal workforce. Chinh said on Wednesday that the labor market will recover and stabilize next year.
Read more: Vietnam faces exodus of workers from factory center for Gap, Nike
“There are still hidden risks that could slow economic recovery and growth if the epidemic cannot be fundamentally controlled to reopen the economy,” Chinh said.
The Prime Minister also forecast that inflation next year will be around 4%, while it will be below this level until 2021. Exports this year will eventually increase by 10.7%, a- he said, without providing any outlook for 2022.
The outlook given by the prime minister on Wednesday will be used by parliament as he sets official economic targets for the coming year, which he will do before the end of the session in mid-November.
(Updates with details everywhere.)
Bloomberg Businessweek Most Read
© 2021 Bloomberg LP