Hanoi (VNA) – Vietnam will record positive economic growth in 2021, ataround 6-7 percent, if the country continue support for vulnerable groups inthe economy, as well as the freshly-rolled out vaccination campaign, saidJonathan Ostry, Deputy Director of the Asia and Pacific Department of theInternational Monetary Fund (IMF).

The Southeast Asian country needs to lay a foundation for strong growth in the mid-term,including ensuring sufficient revenue resources for infrastructure developmentand implementation of public investment, he stressed.

It is necessary for the nation to ensure a resilient financial system, andcontinue efforts to better the investment climate, Ostry added.

Regarding a plan that is being drafted by the Vietnamese Government to assistenterprises during the pandemic, the IMF official held that the country’sfiscal policy should be loosened to support economic activities, and limit negativeimpacts from the pandemic.

Policy adjustments depend largely on the speed of economic recovery at the globallevel, which is undergoing a lot of uncertainties, he said.

Pointing out weak uptake of tax deferrals in Vietnam, particularly in thehardest-hit sectors of the economy, the IMF recommended introduction oftemporary corporate income tax (CIT) loss-carry backwards to improve firms’cash flows, better targeting of temporary CIT reductions to benefit distressedbut viable small-and medium-sized enterprises, and introduction of temporaryprovisions for accelerated depreciation or investment tax credits to lower touser cost of capital and encourage investment.

He moved to underscore that Vietnam’s economic growth story in the past threedecades is notable since it is sustainable and inclusive growth that helpsimprove local livelihoods.

Thanks to market-oriented reforms which enable improvements in the businessclimate, and attraction of huge amount of FDI flows, Vietnam has risen frombeing in the group of the world’s poorest country to gaining the“middle-income” status.

The country should work more to better the business environment and ensure anequal playground, he said, adding this includes reforms geared towardssimplifying and reducing the regulatory burden for domestic firms, easing entrycosts for enterprises, continued reform of state-owned firms, and enhancinggood governance.

Additionally, he suggested Vietnam enhance human capital and technology accessto boost labour productivity, which facilitate investments in more complicatedproducts that can gain better competitive edge in the international market./.