Despite many challenges, this year, Vietnam is still one of the leading countries in terms of growth in the Asia-Pacific region.

The World Bank has lowered its forecast for global economic growth in 2023 to 1.7%, from 3% previously made. Slow growth will occur in 95% of developed economies and nearly 70% of emerging economies.

Despite many challenges, this year, Vietnam is still one of the leading countries in terms of growth in the Asia-Pacific region. This is a statement made in the Global Economic Prospects released by the World Bank on January 11, 2023.

GDP growth is predicted to reach 6.5% in 2023, helping Vietnam to rank second in terms of regional economic growth. Followed by Philippines, Mongolia, Cambodia, China, etc.

Dorsati Madani - economist, World Bank in Vietnam commented: We rely on the main drivers to help maintain Vietnam's economic growth this year, including very strong domestic consumption. It should be remembered that this is a factor that helps domestic production and business to be maintained, goods to be circulated, creating stable cash flow in the economy in the context of low external consumption due to the impact of inflation, demand greatly affected.

The report also pointed out that after an impressive year of recovery, this year's growth is generally moderate, somewhat slowing down due to a stronger-than-expected slowdown in export growth and new investment in the region.

Commodity- and export-dependent economies such as Vietnam, Mongolia, the Philippines, etc. are very vulnerable when large markets reduce their consumption demand.

The slowdown in investment is a matter of serious concern as it is linked to a decline in productivity and trade, and also dampens the overall economic outlook. During the pandemic, investment shrank by around 70% in developing economies and we expect investment growth to continue to decline in the future, said Ayhan Kose - Director of the World Bank Group's Prospects Group

According to the World Bank, with the current fragile economic conditions, any new negative impact such as higher-than-expected inflation and sudden interest rate hikes to prevent inflation, or the re‑emergence  of the COVID-19 pandemic, could push the global economy into a recession. This would mark the first time in more than 80 years that two global recessions have occurred within the same decade.

Kylie Nguyen