Vietnam will keep growth target at 8% despite tariff challenges, says PM
The country will negotiate with the US to secure balanced trade, while making sure other markets are not hurt: Pham Minh Chinh
[HANOI] Vietnam’s prime minister said that the nation’s economic growth target remains unchanged this year despite the many challenges it faces, as the threat of US tariffs creates uncertainty for exporters and businesses.
“The global economy saw unprecedented movements in the past months, putting pressure on the management of the macro-economy,” Pham Minh Chinh said, addressing the National Assembly in Hanoi on Monday (May 5).
Still, Chinh reiterated that the government will keep its target of at least 8 per cent growth this year and double-digit expansion in the coming years. Expansion slowed to 6.93 per cent in the first quarter from 7.55 per cent in the last three months of 2024.
Vietnam, whose exports to the US account for around 30 per cent of its gross domestic product (GDP), will negotiate with the US to “secure balanced trade, while ensuring not to hurt other markets”, Chinh said, as he vowed the nation will continue to combat trade fraud.
Trade officials of the nation are engaged in intense negotiations with their US counterparts, as they seek to avert a 46 per cent tariff that would deal a serious blow to growth.
At the same time, the country is also striving to balance relations with its largest trading partner, China, which has warned nations against cutting deals at Beijing’s expense.
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Vietnam will continue to manage the currency and interest rates in a flexible manner to ensure demand for loans that will help support growth, Chinh told Parliament.
The government will also boost the development of high-speed railway and nuclear power plants, and seek to attract more foreign tech investment, including in the semiconductor and artificial intelligence sectors, he added.
In a sign of the strain on factories, the S&P Global manufacturing purchasing managers’ index for Vietnam showed a contraction in activity in April to its lowest reading since May 2023.
Vietnam is also “pushing for military modernisation, developing military science and technology, producing weapons with high-tech equipment”, Chinh said, without giving further details.
Q1 GDP growth was slower than targeted, putting the government under pressure to meet the 8 per cent growth target for the year, according to Phan Van Mai, head of the National Assembly’s economic and financial committee.
The government should continue to curb inflation, and lower lending interest rates to support businesses while working on measures to respond to risks of a possible trade war, Mai noted.
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