The inflation rate in all three scenarios drawn up by the Prime Minister’s economic advisory team is below 4 percent.
Scenario 1 is based on the assumed ‘normal conditions’ of the national economy.
Scenario 2 retains nearly all the assumptions in Scenario 1, but there are some optimistic adjustments (the world’s economic growth rate is higher and the private sector is more optimistic about the reform process in Vietnam) and higher degree of the fiscal and monetary policy loosening.
Scenario 3 mentions breakthroughs in reform and economic policies, especially renovation in the investment and business environment and competition policies, thus helping improve the private sector’s investments and upgrading state-owned enterprises’ (SOEs) performance.
With the first scenario, the average GDP growth rate would be 6.71 percent in 2018-2020 and 6.63 percent in 2016-2020, to which the contribution of TFP (total factor productivity) is expected to rise from 32.07 percent in 2018 to 35.49 percent in 2020.
|With the first scenario, the average GDP growth rate would be 6.71 percent in 2018-2020 and 6.63 percent in 2016-2020, to which the contribution of TFP (total factor productivity) is expected to rise from 32.07 percent in 2018 to 35.49 percent in 2020.|
The inflation rate in all the three scenarios is below 4 percent per annum. The export growth rate is predicted to decrease to 12.15 percent in 2018 and to 9.63 percent in 2019 before it recovers and reaches the two-digit level in 2020.
The trade balance is believed to fluctuate between trade surplus and trade deficit, at minus (-) 0.19 percent GDP in 2018-2020 and 0.24 percent GDP in 2016-2020. The continued decrease in state budget deficit has been predicted, with the 3.49 percent GDP level projected for 2020.
In the context of state budget discipline and government’s borrowing improvements, the public debts would decrease to 60.22 percent GDP by 2020.
With the second scenario, the average GDP growth rate would be 6.83 percent in 2018-2020 and 6.7 percent in 2016-2020, while the TFP’s contribution to the GDP growth would be lower, 31.55 percent in 2018 and 35.71 percent in 2020.
In the context of the more rapid economic recovery and total demand increase, the export growth rate would be at two-digit levels in 2018-2020, reaching 12.4 percent in that period, and 14.41 percent in 2016-2020.
If scenario 2 happens, the inflation rate would be a little higher than scenario 1, or exceed 4 percent by 2019-2020. So, the expected GDP growth rate would be higher and the pressure on inflation would be worse.
The typical characteristic of the scenario 3 is that the breakthrough in institutional reform would lead to improvement in growth quality.
With optimistic outlook, economies have projected very high indexes – 7.47 percent GDP growth rate in 2018-2020 and 7.08 percent in 2016-2020. As for the export growth rate, the figures would be 15.51 percent and 15.28 percent, respectively- Vietnamnet.
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