A corner of HCM City - the southern largest economic hub of Vietnam (Photo: VNA)
Hanoi (VNA) –
Vietnam will record positive economic growth in 2021, at
around 6-7 percent, if the country continue support for vulnerable groups in
the economy, as well as the freshly-rolled out vaccination campaign, said
Jonathan Ostry, Deputy Director of the Asia and Pacific Department of the
International Monetary Fund (IMF).
The Southeast Asian country needs to lay a foundation for strong growth in the mid-term,
including ensuring sufficient revenue resources for infrastructure development
and implementation of public investment, he stressed.
It is necessary for the nation to ensure a resilient financial system, and
continue efforts to better the investment climate, Ostry added.
Regarding a plan that is being drafted by the Vietnamese Government to assist
enterprises during the pandemic, the IMF official held that the country’s
fiscal policy should be loosened to support economic activities, and limit negative
impacts from the pandemic.
Policy adjustments depend largely on the speed of economic recovery at the global
level, which is undergoing a lot of uncertainties, he said.
Pointing out weak uptake of tax deferrals in Vietnam, particularly in the
hardest-hit sectors of the economy, the IMF recommended introduction of
temporary corporate income tax (CIT) loss-carry backwards to improve firms’
cash flows, better targeting of temporary CIT reductions to benefit distressed
but viable small-and medium-sized enterprises, and introduction of temporary
provisions for accelerated depreciation or investment tax credits to lower to
user cost of capital and encourage investment.
He moved to underscore that Vietnam’s economic growth story in the past three
decades is notable since it is sustainable and inclusive growth that helps
improve local livelihoods.
Thanks to market-oriented reforms which enable improvements in the business
climate, and attraction of huge amount of FDI flows, Vietnam has risen from
being in the group of the world’s poorest country to gaining the
The country should work more to better the business environment and ensure an
equal playground, he said, adding this includes reforms geared towards
simplifying and reducing the regulatory burden for domestic firms, easing entry
costs for enterprises, continued reform of state-owned firms, and enhancing
Additionally, he suggested Vietnam enhance human capital and technology access
to boost labour productivity, which facilitate investments in more complicated
products that can gain better competitive edge in the international market./.