Vietnam needs to continue to promote growth drivers and optimize resources to overcome the challenges this year, Dr. Can Van Luc, Chief Economist at the Bank for Investment and Development of Vietnam (BIDV) and President of BIDV Training and Research, has said.

“Vietnam has accumulated experience in pandemic prevention, risk management, and crisis management over the years, which will help the country overcome the difficulties in 2023,” he told the Vietnam Economic Scenario Forum 2023 held by VnEconomy / Vietnam Economic Times in cooperation with the Ministry of Foreign Affairs in Hanoi on January 11.

In its latest Global Economic Outlook, the World Bank (WB) lowered its forecast for global economic growth in 2023 to 1.7 per cent, the slowest since 1993, as a result of high inflation, rising interest rates, falling investment, and disruptions from the impact of the Russia-Ukraine conflict.

Under pressure from the difficulties and challenges in the global economy, after a strong recovery in 2022, the WB puts Vietnam’s economic growth at 6.3 per cent this year.

Reviewing the risks and challenges in 2022 and looking to 2023, he said there will be four increases this year: in war and pandemics; inflation and interest rates; financial risks; and energy and food security risks.

There will also be two obvious declines: a reduction in corporate profit margins and slow economic recovery together with slight recession in 2023, according to Mr. Luc.

Among the major challenges facing the global economy in 2023, analysts are paying much attention to the possibility of a global recession and whether global inflation has peaked as yet or not.

Regarding inflation targets, inflation data from around the world and major regions and countries such as the US, Europe, the UK, and Germany show that inflation has basically passed its peak. The global Consumer Price Index (CPI) in 2022 stood at 8.8 per cent and the figure is forecast to fall to 6.5 per cent in 2023 and 4 per cent in 2024, he said.

Mr. Luc also warned that the global economic downturn will cause Vietnam’s export and investment markets to shrink and slow down the recovery and growth of international tourism. Vietnam depends on international trade and exports, so it will among the countries in ASEAN suffering the strongest decline when facing “headwinds”.