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Optimistic about Vietnam's economic growth in 2024

Vietnam's economy is "sprinting" to complete the growth target set at the beginning of the year, striving for economic growth of 6.5%.



The socio-economic situation report for July and 7 months of 2024 announced by the General Statistics Office shows that, in terms of agricultural production, as of July 15, 2024, the whole country had planted 1,206.9 thousand hectares of winter-spring rice, equal to 99.5% of the same period in 2023; by mid-July, the whole country had planted 1,902.2 thousand hectares of summer-autumn rice, equal to 99.6% of the same period in 2023.


Regarding forestry, the area of ​​newly planted forests nationwide in July is estimated at 13.8 thousand hectares, up 6.9% over the same period in 2023. In the first 7 months of 2024, the area of ​​newly planted forests is estimated at 143.4 thousand hectares, up 4.6% over the same period in 2023. Regarding aquaculture, the aquaculture output in July is estimated at 841.1 thousand tons, up 2.2% over the same period in 2023. In the first 7 months of 2024, the aquaculture output is estimated at 5,225.8 thousand tons, up 2.6% over the same period in 2023.


According to the General Statistics Office, industrial production maintained positive growth momentum. Specifically, the index of industrial production (IIP) in July is estimated to increase by 0.7% over the previous month and by 11.2% over the same period in 2023. In the first 7 months of 2024, the IIP is estimated to increase by 8.5% over the same period in 2023. The index of industrial production in the past 7 months compared to the same period in 2023 increased in 60 localities and decreased in 03 localities nationwide.


Notably, in July, the whole country had 14.7 thousand newly established enterprises, down 6.3% compared to June 2024 and up 7.3% compared to the same period in 2023. In addition, the whole country also had more than 6.8 thousand enterprises returning to operation, up 26.2% compared to the previous month and down 0.7% compared to the same period in 2023. In the first 7 months of 2024, the whole country had about 139.5 thousand newly registered enterprises and returning to operation, up 5.8% compared to the same period in 2023; on average, there were more than 19.9 thousand newly established enterprises and returning to operation per month.


The above figures show that economic bright spots are increasing. The Vietnamese economy has clearly recovered, with each month being more positive than the previous month, each quarter being more positive than the previous quarter, achieving many important results.


From the above "telling" numbers, recently, many international organizations have simultaneously raised their growth forecast for Vietnam in 2024.


Specifically, the World Bank (WB) said that economic reforms since 1986 combined with favorable global trends have quickly helped Vietnam develop from one of the poorest countries in the world to a lower middle-income country. "Vietnam is now one of the most dynamic countries in East Asia and the Pacific" - WB assessed.


According to analysis from the WB, the scale of Vietnam's gross domestic product (GDP) calculated at current prices in 1986 was only 26.34 billion USD, by 2023 it had increased to 429.72 billion USD, 16.3 times higher. GDP per capita calculated at current prices in 1986 was 430.2 USD, by 2023 it had increased to 4,346.8 USD, 10.34 times higher.


National income at current prices in 1989 reached 14.15 billion USD, by 2023 it increased to 412.94 billion USD, 29.2 times higher. GNI per capita at current prices in 1989 reached 220 USD, by 2023 it increased to 4,180 USD, 19 times higher.


Thanks to its solid foundation, the WB assessed that Vietnam's economic has shown remarkable resilience during times of crisis. Economic growth is expected to reach 5.5% in 2024, up from 5% in 2023.


"Vietnam will be able to achieve higher economic growth, not only because domestic resources are used to ensure higher productivity, but also because it can leverage much-needed capital in the international market to achieve its goal of becoming a high-income economy," said Mr. Ketut Ariadi Kusuma, senior financial sector specialist of the World Bank.


Also giving a forecast for Vietnam's economy, UOB International Bank said that Vietnam's economy is still growing positively with forecast growth reaching more than 9%, GDP growth rate forecast at about more than 6%.


According to UOB, Vietnam’s GDP growth reached 6.4% year-on-year in the first half of this year, mainly driven by the manufacturing, industrial and services sectors. “The outlook for Vietnam’s economy remains positive in 2024, with GDP growth forecast at 6% and the potential to exceed this figure. This optimism is based on strong performance in sectors such as manufacturing, electronics, furniture and automotive,” said Mr. Suan Teck Kin, Head of Global Economics and Markets Research, UOB.


Vietnam’s strengths, according to UBO, lie in its competitiveness in the electronics and electrical industries, but there is a risk of over-reliance on this sector. To mitigate this, Vietnam should diversify its exports by expanding into traditional sectors such as textiles, footwear, wood products, seafood and agriculture.


In addition, as the exchange rate has now fallen, the State Bank has eased pressure on exchange rate management and may keep interest rates high to address inflation concerns. VND is expected to continue to appreciate. VND has begun to appreciate back to a stronger level of 25,000 against the USD. In the future, VND is expected to gradually appreciate to 24,100 against the USD in the second quarter of 2025.


Regarding Vietnam's economic growth in 2024, on September 2, Prime Minister Pham Minh Chinh signed Official Dispatch No. 85/CD-TTg on managing the State budget estimates and sent it to ministers, heads of ministerial-level agencies, government agencies; and chairmen of People's Committees of provinces and centrally run cities.


According to the Official Dispatch, in the first 8 months of 2024, the socio-economic situation continued to be maintained stably and clearly demonstrated positive recovery, major balances of the economy were ensured, inflation was controlled, economic growth was promoted, national defense, security, social order and safety were maintained, social security and people's lives were ensured.


State budget revenue in the first 8 months of the year is estimated to reach 78.5% of the estimate under the condition that policies have been implemented to exempt, reduce, and extend many types of taxes, fees, charges, land rents, and other budget revenues; state budget expenditures are strictly and economically managed; state budget balance is ensured, state budget deficit, public debt, government debt, and foreign debt of the country are within the scope permitted by the National Assembly.


To maintain growth momentum, Prime Minister Pham Minh Chinh requested Ministers, heads of agencies and units to continue effectively implementing key solutions and tasks to promote administrative procedure reform, improve the investment and business environment, enhance national competitiveness, remove difficulties for production, business and socio-economic development.


At the same time, focus on implementing fiscal and monetary policy solutions and other issued macroeconomic policies to remove difficulties for businesses and people, control inflation, maintain macroeconomic stability, maintain growth momentum and ensure major balances of the economy; strive for a GDP growth rate of about 7% for the whole year of 2024, exceeding the set target, creating the premise and momentum for 2025 and the 2026-2030 period.


(tapchitaichinh)



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