HANOI: Recent forecasts are optimistic about the Vietnamese economy in 2024 with the gross domestic product (GDP) growth rate poised to reach around 7% for the full year, higher than the National Assembly’s target set at 6.5%.
The Central Institute for Economic Management (CIEM) on Tuesday lifted its growth forecast for the Vietnamese economy from 6.48%, to 6.95%, on the back of global economic recovery.
CIEM’s director Nguyen Hong Minh said at a conference discussing new drivers for quality growth, that Vietnam’s socioeconomic development achieved impressive results in the first half of this year, with a focus on stabilising the economy, controlling inflation and ensuring trade balances.
GDP expanded at 6.42% from January to June, while inflation was under control, and exports and inflows of foreign direct investment (FDI) were robust. “More importantly, Vietnam is considered an example of reform and economic integration,” Minh said.
“Economic restructuring, regional economic development, improving business sentiment, enhanced labour productivity, together with digital and green transitions are becoming bold policies.”
Nguyen Anh Duong, head of the CIEM’s General Research Department, said that the prospect of Vietnam’s economic growth is positive compared to other countries in the region.
CIEM also provided two scenarios for GDP growth in 2024.
In the first scenario, GDP growth is forecast to reach 6.55% in 2024 with exports to increase by 9.54%, inflation at 4.31% and the trade balance at a record surplus of US$5.7bil.
Duong said that the first scenario is built on the premise the global economy develops following projections of international organisations and Vietnam maintaining similar policies as in the first half of the year.
In the second scenario, GDP growth can reach 6.95% if the global economy sees more rapid recovery, multinational corporations increase investments in South-East Asia, including Vietnam, and investments in digital and green transitions see positive developments. In this scenario, exports increase by 11.64% over 2023, inflation is at 4.12% and the trade surplus at US$7.3bil.
“To reach the GDP growth rate of 6.95%, Vietnam needs to effectively implement reforms and economic-management policies to maximise the efficiency of public investments and credit absorption, improve labour productivity, enhance the business environment and national competitiveness,” Duong said.
Greater efforts should be made to increase the quality of growth, the capacity for innovation and adaptation to major trends such as digital and green transition, enhance labour productivity and complete the legal framework for new economic models such as the circular economy, digital economy, sharing economy and innovative economy, he said.
He added that close watch must be kept on inflation, especially the impacts of wage and price increases for government-managed entities, to maintain room for fiscal policies in case there are external shocks.
After impressive economic growth in the first half of this year, the Planning and Investment Ministry recently proposed to the government a growth scenario for the full year to 6.5%-7%, instead of 6%-6.5% target set in an earlier government resolution.
The ministry raised two growth scenarios with GDP to reach 6.5% and 7%, respectively.
The ministry proposed that the government strive for the target of 7% or higher based on positive growth in various economic sectors, rapid recovery in private investment and state-owned enterprises, positive growth in FDI, robust exports, improving tourism and consumption and new policies.
Planning and Investment Minister Nguyen Chi Dung said that the early enforcement of new laws on land, real estate and housing would create favourable conditions for the property market to recover in the second half of this year, which would positively affect economic growth.
Meanwhile, the projections of most international organisations put growth for Vietnam’s economy at around 6% this year.
According to Jose Vinals, group chairman of Standard Chartered, the Vietnamese economy will perform better this year to reach a GDP growth of 6% in the second half, leading to an overall yearly rate of 6%.
“Relative to most other economies, 6% growth is quite impressive, nearly double the global rate and higher than emerging markets, which are expected to grow around 4% this year. This places Vietnam among the top economies globally, which is something to be happy about,” Vinals said.
The Singaporean-based United Overseas Bank’s Global Economics and Market Research Unit earlier this month maintained its growth forecast for Vietnam at 6% for 2024.
The International Monetary Fund (IMF) projects the Vietnamese economy to expand by close to 6% in 2024, driven by a recovering export sector, robust FDI and policy support. — Viet Nam News/ANN
