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Ms. Carolyn Turk, World Bank Country Director in Vietnam, said that Vietnam has the fiscal space to implement measures to boost growth, unlike many other countries |
The World Bank today launched the March 2023 edition of the Taking Stock report – our bi-annual economic update for Vietnam. The report named ‘Harnessing the potential of the services sector for future growth’ announced Vietnam’s economic growth is projected to ease to 6.3 percent in 2023 from a robust 8 percent last year, as services growth moderates while prices and interest rates skyrocketed.
Additionally, the WB forecast that in 2024, the Southeast Asian country’s growth will only increase to 6.5 percent when the economies that are key export markets of Vietnam have recovered.
Speaking at the announcement ceremony, Ms. Carolyn Turk, World Bank Country Director in Vietnam, said that Vietnam has the fiscal space to implement measures to boost growth, unlike many other countries.
According to WB experts, if properly leveraged, services can play a crucial role in supporting Vietnam's sustained productivity growth and achieving its goal of becoming a high-income economy by 2045.
All high-income economies have a large services sector that provides the largest sources of employment and value addition. The small scale of firms, restrictions to services trade, low technological adoption and few inter-sectoral linkages affect the productivity of the services sector.
Paying special attention to the financial sector, senior economist at the World Bank Dorsati Madani emphasized that this sector has been under increased pressure in 2022. The policy of expanding fiscal policy was as originally planned affected by challenges arising in the budget implementation process.
The short-term outlook is still favorable, but Vietnam is facing risks, said Ms. Dorsati Madani. Prolonged inflation in the United States and the euro area could lead to further tightening of financial mobilization conditions, affecting Vietnam's financial sector.
