Vietnam’s leaders celebrate strongest economic growth in 12 years

Economists say last year’s 8% expansion will be difficult to match in 2023.
By RFA Vietnamese
Vietnam’s leaders celebrate strongest economic growth in 12 years A garment factory in Vinh Phuc province.

The announcement by the General Statistics Office of Vietnam that the country’s economy likely grew 8.02% last year led to celebration among senior members of the Communist Party, but some economists cast doubt on the accuracy of the estimate and warned conditions may be tougher this year.

On Dec. 20, Prime Minister Pham Minh Chinh called the data "a proud, bright spot in the context of a developing country,” saying it showed the economy was progressing.

His optimism was shared by Party General Secretary Nguyen Phu Trong.

"In the context of many difficulties and great challenges ... thanks to the cooperation and efforts of the whole Party, the people, the army ... the economy continues to grow rapidly, reaching 8%, much higher than the plan and a high level compared to other countries in the region and around the world,” he said at a Jan. 3 conference reviewing the government’s work last year and outlining its tasks for 2023.

Not verified

Some economists are concerned about the reliability of the data.

Economist Nguyen Tri Hieu, who has over 30 years’ experience working in banking and finance in the U.S., Germany and Vietnam, told RFA that accuracy depends on the method of calculation and the ability of the statistician, information which is not available in Vietnam

“The problem is that there is no agency to verify the statistics of the General Department of Statistics. It's the only number we know," he said.

Hieu said in order to gauge the health of the economy it is important to consider factors such as workers’ living standards, social security, health and safety, and environmental issues.

Norway-based economist Nguyen Huy Vu, who worked for Germany’s Bundesbank, said the 8% growth figure has no meaning without considering factors that would indicate whether people are better or worse off than previous years.

“[If] the living standards of workers are not improved, many jobs are not created, the health of the economy is not increased, businesses do not increase, then the number, no matter how high, becomes meaningless," he said.

Garment factory 2.jpeg
Workers at a garment factory in Hung Yen province. Credit: Reuters

‘People are very poor’ 

The owner of an electronics assembly business in Ho Chi Minh City told RFA people’s lives, especially those of unskilled workers, have been extremely difficult over the past year.

Nguyen Dinh De said processing orders have fallen because Europe and the U.S. entered what he called “an economic crisis.”

In addition, the war in Ukraine pushed up global raw material prices, particularly oil. From June to September 2022, gasoline prices in Vietnam rose above VND30,000/liter (U.S.$1.23/liter).

“People have no jobs but raw materials prices are still high, transportation costs increase, all other commodities increase in price,” De said. “The people are very poor, [their lives] are very difficult."

More than 143,000 companies went out of business last year, according to the General Statistics Office, with an average of nearly 400 bankruptcies a day.

“If the government says 8% growth is the highest rate in the past 12 years, that’s a good point. But looking at people's lives, the difficulties of businesses, looking at the number of businesses that have to close, we understand the downside," De said.

2023 economic outlook

Even though Vietnam’s gross domestic product grew 8% and total trade value reached a record U.S.$733 billion last year, Nguyen Tri Hieu said the economy still had many problems. The most serious, he said, was the instability of financial markets, with the VN-Index losing as much as 300%, a liquidity crunch as companies struggled to sell bonds and continued weakness in the real estate sector. He said the economy will face a rough ride in the first half of this year before becoming more stable in the second half.

Nguyen Huy Vu said economic growth could be weaker this year because fewer outsourcing orders from the U.S. and Europe will cut the inflow of foreign currency.

With global interest rates rising, Vietnam will be forced to follow suit to keep exchange rates stable, Vu said. Higher borrowing costs will make it difficult for businesses to invest in higher production, he said, and manufacturers will face difficulties.

Trinh Khanh Ly, formerly at the Vietnam General Confederation of Labor and the International Labor Organization in Hanoi, is a specialist in labor law, income inequality, labor export policy and trade unions in Vietnam.

She told RFA the recovery of Vietnam's outsourcing companies depends on the economic strength of the major markets they export to, Japan, the U.S. and the E.U. 

“These are the markets that, after being greatly affected by COVID, are being heavily affected by the fuel crisis, the war in Ukraine, high inflation and are expected to continue to face many difficulties in 2023,” she said. “Therefore, I think Vietnam should prepare for a worse scenario where the loss of jobs in these enterprises will continue to occur in 2023 and the next few years."

Translated by RFA Vietnamese. Edited by Mike Firn.


Add your comment by filling out the form below in plain text. Comments are approved by a moderator and can be edited in accordance with RFAs Terms of Use. Comments will not appear in real time. RFA is not responsible for the content of the postings. Please, be respectful of others' point of view and stick to the facts.


Dega people in the Central Highlands in Vietnam
Jan 10, 2023 06:34 PM

From the Sartrean point of view, humans have become by stopping another piece from becoming. It is so true in the case of the Dega people in the Central Highlands of Vietnam.
. They suffer political, and economic enslavement, and are the target of genocide because of coffee. The production of coffee is a major factor in what is, in effect, the very end of the world for them; a story of killing and systematic destruction of their history, culture, language, and identity. The seizure of their lands to produce and consume modernly refined and the best-tasting coffee is, in effect, the blood of the Dega people.
The Dega people have been deprived of almost everything. For many of them their parents, aunts, uncles, and/or grandparents, were assassinated and/or “disappeared” (As in Central and South America, that adjective has become a verb in Vietnam) during and just after the “liberation” by the North Vietnamese army in 1975. All of the Dega leaders of the 1950 and 1960s have been “eliminated.” Their traditional clan lands have nearly all been seized and turned over to Vietnamese settlers or state or private corporations.
So, the Dega people are left to try to compete just to make a living by working on the farm of Vietnamese settlers or state own plantations, with their hands, literally, tied behind their backs, in the context of a single-party state capitalist system complete with Party favorite oligarchs and rapacious corporations, both state and private, looking for and getting the advantage, especially when it comes to access to the lands of the Central Plateau. The Dega people’s very rights to existence were denied, and their history, culture, identity, and language are destroyed.
Dear RFA, Do you suppose that this might be called genocide? If not, what else?