The Organization for Economic Co-operation and Development (OECD) forecasts Vietnam's economy to grow steadily, with Gross Domestic Product (GDP) at 6.5% in 2023 and 6.6% in 2024 .

On the morning of April 26, in Hanoi, the Ministry of Planning and Investment chaired and coordinated with the Organization for Economic Cooperation and Development (OECD) and the Asian Development Bank (ADB) and other ministries and agencies organized the launch of "The OECD Economic Report: Vietnam 2023".

This is the first report on Vietnam's economy made by OECD and ADB.

Announcing the report, Dr. Koen Vincent of the OECD's Economic Department said that Vietnam has made significant economic progress over the past decades and maintained a high growth rate. Extensive and ongoing reforms since the late 1980s have been key to this economic success. Vietnam's economy has also demonstrated resilience to shocks, including the COVID-19 pandemic. During the pandemic, the country's economic growth outperformed most Southeast Asian economies.

OECD forecasts Vietnam's economy to grow steadily, with Gross Domestic Product (GDP) at 6.5% in 2023 and 6.6% in 2024.

However, according to Dr. Koen Vincent, with the openness of the economy, Vietnam is vulnerable to geopolitical uncertainties and the risk of supply chain disruptions. Besides, in the short term, external conditions threaten the recovery of the economy. Supply chain disruptions could continue to weigh on global trade, and rising inflation around the world could put further downward pressure on Vietnam's exchange rate.

With significant challenges ahead, the OECD believes that Vietnam needs to make more efforts to promote structural reforms to further strengthen market forces.

In addition, according to the OECD, in order to reduce dependence on fossil fuels, Vietnam should stop new investment in coal and accelerate the implementation of a carbon market. Since these reforms would require additional financial resources, the tax base should be expanded to increase government revenue.

The OECD Economic Report: Vietnam 2023 offers three key messages. First, macroeconomic policy needs to help strengthen the economy's resilience.

In the short term, the priority is to mitigate the impact of high energy prices through targeted support to vulnerable households, rather than implementing further expansionary fiscal measures.

In the medium term, the report highlights the need to strengthen macroeconomic policy frameworks by improving fiscal sustainability through expanding the tax base. At the same time, it is necessary to strengthen the social protection system and reduce the size of the informal economy.

Besides, Vietnam needs to further improve the business environment and facilitate the digital transformation process to maintain high economic growth after the recovery.

In its final message, the report points out that in order to achieve the net zero emissions target by 2050, Vietnam will need to maintain a high level of investment in renewable energy and pursue high energy efficiency.

Kylie Nguyen