According to the ministry, the target, which is lower than the 6.7 per cent growth rate set for this year, is drafted based on the global and domestic economy forecast for next year.
Although many forecasts that the global economy in 2018 will recover, but it is expected only a slight recovery and still implies many unpredictable changes, the ministry said.
It said that the domestic economy is also facing many difficulties, explaining that Vietnam’s economic model is still based on cheap labor and low technology. Land and natural resources are gradually exhausted while the usage efficiency has not increased significantly. Besides, non-performing loans and public debt are not also fully resolved.
In addition, the ministry noted, growth drivers, which base on the mining industry or the significant contribution of overseas remittances and large producers such as Samsung and Formosa, have been utilized in 2017 and are unlikely to accelerate next year. In this context, the mining industry may continue to reduce output while supports from the fiscal and monetary policies for the economic growth will limit.
Economists have so far also agreed with the MPI’s GDP growth target for next year, saying that the growth rate is reasonable.
Former standing deputy minister of Planning and Investment Cao Viet Sinh said that the current situation of the economy is positive and can create momentum for the economy in 2018, however, it is necessary to prepare for risks and instability that can occur in the next year.
“6.5% is a reasonable and feasible growth rate in 2018. It thereby can create a more sustainable growth platform for the next years to help the Government better implement the five-year Socio-Economic Development Plan in 2016 - 2020 ", Sinh said.
Echoing Sinh, economist Nguyen Quang Thai said that instead of pursuing high growth target, Vietnam should set a GDP growth target of 6.5% next year. He explained that at the rate, Vietnam can have more time to solve the fundamental problems of the economy, including economic restructuring and improvement of growth quality.
Container cranes accelerate goods transport at Tien Sa Port Factory of Da Nang Port.
According to the General Statistics Office, Viet Nam’s GDP growth rate in the third quarter this year rose unexpectedly by 7.46 per cent, helping the index in the first nine months increase by 6.41 per cent.
Thanks to the strong recovery of the economy in the third quarter, Viet Nam expected to meet the GDP growth rate of 6.7 percent this year.
Minister of Planning and Investment Nguyen Chi Dung said that the third quarter is often the most important time to consider whether the country can meet the annual plan. With the GDP growth gained in the third quarter and in the first nine months, he said that Viet Nam’s economy has overcome the most difficult period in 2017.
“As the GDP growth rate in the next quarter is often higher than the previous quarter – expecting at roughly 1 percentage points – Vietnam’s GDP will likely exceed the target of 6.7percent,” Dung said.
To meet the annual target, GDP in Q4 must rise by 7.31 percent.
MPI also forecasts that all 13 socio-economic indicators targeted for 2017 will be completed successfully, of which 8 indicators are expected to even exceed the targets.
However, Dung also mentioned to a "backup plan", saying if the GDP growth in Q4 is halted, the risk of unsustainable growth is very high. He therefore suggested the Government to have more radical and prudent management solutions in a move to gain sustainable growth in the next years./.