Vietnam's lending interest rates are higher than many countries in the world, while last year, Vietnam was one of the countries with the lowest inflation level. This paradox needs to be explained to find solutions to ease the burden on businesses.
The demand-pull and cost-push inflation will put pressure on the country's efforts to control inflation amid surging demand and strengthening of the US dollar which yields increased import prices.
Vietnam could face many new challenges in 2023, although experts believe that despite adverse effects from the outside, the Vietnamese economy has remained rather resilient so far.
Even though the Covid-19 pandemic is well over and businesses are making efforts at recovery so that production can continue and jobs can be retained, other factors have now come into play.
Economic instability across the entire globe is bound to affect Vietnam as well. Although economic data for Vietnam shows that difficulties have been overcome, but the fact remains that scores of businesses are still struggling.
Several countries are raising interest rates in an effort to curb inflation, even though higher interest rates can push economies into even deeper recession.
Standard Chartered Bank has raised its Vietnam GDP growth forecast for 2022 to 7.5 percent from the previous 6.7 percent and for 2023 to 7.2 percent from 7.0 percent to reflect robust Q3 growth of 13.7 percent year-on-year. The last quarter 2022 growth is anticipated at 4.0 percent.
Deputy Prime Minister Le Minh Khai in yesterday’s meeting with the Price Management Steering Committee concluded that the price management and administration should continue to be flexible and active to ensure inflation control for both this year and 2023.
Economists have forecast Vietnam’s inflation will be kept at around 3.3-3.8 percent this year, similar to the National Assembly-set target of below 4 percent, adding that the pressure for 2023, however, remains huge and requires appropriate response solutions.
ADB Country Director Andrew Jeffries has talked to the Vietnam News Agency on the recent interest rate hike by the State Bank of Vietnam in the context of the Fed, ECB and a number of countries raising their rates to curb inflation.
Prime Minister Pham Minh Chinh has assigned urgent tasks to particular ministries and agencies to deal with current economic difficulties in the new situation during a Government law-building session on September 22.
"Despite high growth, Vietnam’s economy has not returned to its full potential in 2022," WB experts said in the report ‘Taking Stock August 2022’, updating Vietnam's economic situation titled ‘Educate to Grow’. The report was published this morning, August 8.
The current appreciation of the US dollar will certainly help export businesses to benefit more, however, behind these benefits, there are still many rising concerns such as rising global inflation. It also seems that the pressure is becoming quite high on exporters for deliveries in the last months of the year.
Prime Minister Pham Minh Chinh chaired a meeting attended by ministries and sectors on July 28 to discuss short- and long-term measures for keeping inflation under control, stabilizing the macro-economy, and promoting socio-economic recovery and development.
