IMF official: Vietnam has many development opportunities from digitalization and green transformation

The regional director of the International Monetary Fund (IMF) said that in the medium term, the IMF expects Vietnam to have many opportunities from digitalization and green transition, and forecasts Vietnam's economic growth at about 6.5%.

Director of the Asia- Pacific Department of the International Monetary Fund (IMF) Krishna Srinivasan. (Photo: IMF/VNA)

Krishna Srinivasan, director of the Asia- Pacific Department of the International Monetary Fund (IMF), said that GDP growth unexpectedly picked up in the second half of 2023, driven by strong domestic demand, especially in emerging economies in Asia such as Malaysia, the Philippines, and Vietnam; most notably, India has recorded positive growth surprises.

Speaking at a press conference on the Economic Outlook for Asia and the Pacific on April 18, within the framework of the Spring Annual Meetings of the IMF and the World Bank (WB) in Washington (USA), Mr. Srinivasan said that the growth of the Asia-Pacific region is estimated to reach 5% in 2023 - much higher than the 3.9% recorded in 2022 and 0.4 percentage points higher than the IMF's forecast in October 2023.

In addition, the IMF forecasts that the region's growth in 2024 will reach 4.5%, with Asia-Pacific contributing about 60% of global growth.

Mr. Srinivasan said that boosting growth depends on each country. In China and India, the IMF expects investment to contribute a lot to growth.

In emerging Asia outside China and India, robust private consumption will remain the main growth driver. In some advanced economies such as South Korea, the IMF expects positive momentum from exports.

Regarding Vietnam's economy, Mr. Srinivasan said that in the medium term, the IMF expects Vietnam to have many opportunities from digitalization and green transformation, as well as economic growth of about 6.5% based on a lot of potential, large foreign direct investment and efforts being made to improve the business environment and infrastructure.

On inflation, the IMF recommends that Asian central banks focus on domestic inflation and avoid making policy decisions that rely too much on the anticipated moves of the US Federal Reserve (Fed).

If central banks rely too much on the Fed's forecasts, it could undermine domestic price stability.

Mr. Srinivasan also described the challenge of monetary and fiscal policies, in which the IMF recommended that governments focus on consolidation to limit the increase in public debt and rebuild financial buffers.

On the same day, the IMF said that economies in the Middle East and North Africa (MENA) region will grow at a slower pace this year than previously forecast as the conflict in the Gaza Strip, attacks on Red Sea shipping and falling crude oil production add to existing challenges of high debt and borrowing costs.

The IMF revised down its 2024 growth forecast for MENA to 2.7%, down from 3.4% in October 2023. However, this is an improvement from 1.9% growth in 2023.

The IMF believes that if uncertainties ease by 2025, growth in the region will rise to 4.2%.

In MENA, oil-exporting countries have outperformed, with the IMF forecasting growth for these countries at 2.9% this year, 1 percentage point higher than last year.

The IMF assessed that the voluntary cuts in oil production by some countries, notably Saudi Arabia, will hinder the growth rate of oil-producing countries in the MENA region in 2024./.

(Vietnam+)