In April, many economic indicators such as foreign direct investment attraction, business registration, total retail sales, freight transport and industrial production... improved compared to previous months, creating momentum for the following months.
However, according to the report on the socio-economic situation in April 2023 and the first four months of the year just released by the General Statistics Office, the economy continues to face many difficulties that require determination from both the political system and the business community to achieve the goals for the whole year of 2024.
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| Shrimp processing line for export at Minh Phu Seafood Corporation's factory in Ca Mau province. Photo: Vu Sinh/VNA |
Recovery continues but slowly
The General Statistics Office said: In the context of the world facing many difficulties and challenges, Vietnam's socio-economic situation in April continued to change quite positively, contributing to improving the overall results of the first 4 months of the year and creating momentum for the following months.
Specifically, the macro economy continues to be stable, inflation is controlled, major balances are ensured, the consumer price index (CPI) in April 2024 increased by 0.07% compared to the previous month. Compared to December 2023, the CPI in April increased by 1.19% and compared to the same period last year increased by 4.4%. On average, in the first 4 months of the year, the CPI increased by 3.93% compared to the same period last year; core inflation increased by 2.81%.
Along with that, the monetary market is basically stable; lending interest rates decrease; exchange rates are stable in line with market developments; and the safety of the banking system is ensured. Total state budget revenue in April 2024 is estimated at 175.6 trillion VND; total state budget revenue in the first four months of 2024 is estimated at 733.4 trillion VND, equal to 43.1% of the annual estimate and up 10.1% over the same period last year.
Also in April, the total import and export turnover of goods was estimated at 61.2 billion USD, down 5.2% compared to the previous month and up 15% compared to the same period last year. In the first 4 months of the year, the total import and export turnover of goods reached 238.88 billion USD, up 15.2% compared to the same period last year; of which, export increased by 15%; import increased by 15.4%. The trade balance of goods had a surplus of 8.4 billion USD.
Foreign direct investment (FDI) realized in Vietnam in the past 4 months is estimated at 6.28 billion USD, up 7.4% over the same period last year. This is the highest realized FDI capital in the first 4 months of the year in the past 5 years.
Also in April 2024, the country had 15.3 thousand newly registered enterprises with registered capital of 175.8 thousand billion VND. This figure decreased by 4.1% in the number of enterprises and increased by 13.7% in registered capital compared to the same period in 2023. However, compared to March 2024, the number of new enterprises in April 2024 still increased by 8.4%.
Economist, former General Director of the General Statistics Office Nguyen Bich Lam commented: The economy in April and the first four months of 2024 continued to recover, but slowly. The industrial production index (IPP) in April 2024 increased by only 0.8% compared to the previous month. Compared to the same period last year, the industrial sector recovered slowly, with some major industries increasing slightly or decreasing.
Moreover, the agricultural sector, which has been the mainstay of the economy in recent years, is facing drought and saltwater intrusion, affecting food production; livestock production has declined. Despite favorable weather, fisheries exploitation has not increased significantly.
Along with that, the export of goods in April decreased compared to the previous month, the export turnover in the first 4 months of 2024 still increased but the growth rate was lower than in the first quarter of 2024. The number of enterprises withdrawing from the market is still higher than the number of enterprises entering the market, reflecting the still very difficult situation of the business sector.
The world economy is facing instability, the US economy is forecast to slow down in the first quarter of 2024, much lower than the previous forecast and 1.8 percentage points lower than the GDP growth rate of the fourth quarter of 2023. Inflation in March 2024 of the US economy accelerated again, the USD appreciated, consumer spending decreased, the US Federal Reserve (Fed) has just decided to keep interest rates unchanged for the 6th consecutive time, showing that the Fed will delay the time to lower interest rates. Along with that, the exchange rate between VND and USD increased, creating pressure on imported inflation and restraining the growth of our country's economy....
Coordinate solutions
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| Production line of electronic equipment and lighting equipment for cars and motorbikes at Stanley Vietnam Electric Company Limited (Japanese investment) in Hanoi. Photo: Danh Lam/VNA |
In the context of the domestic and world economy still facing difficulties, uncertainties and unpredictable weather phenomena, the agricultural, forestry and fishery sector is facing many difficulties, causing growth to slow down. In order for the Vietnamese economy to overcome difficulties and recover more quickly and sustainably, economic experts suggest that the Government and localities focus on promoting domestic aggregate demand, implementing promotional programs; preferential credit programs for consumption; improving service quality, reducing or stabilizing transportation fares, especially airfares to encourage domestic tourism and attract international tourists.
To resolve difficulties and unblock capital sources to create liquidity for businesses, it is necessary to continue to implement fiscal and monetary policies synchronously and consistently. At the same time, promptly refund taxes to businesses; have credit policies suitable to the production and business characteristics and needs of each industry and field; implement preferential credit packages for key industries, fields and production and export enterprises of the economy.
In addition, the relevant sectors implement policies on tax and land rent exemption, reduction, and extension; exemption and reduction of fees and charges to reduce costs and enhance the competitiveness of enterprises. In particular, ensure adequate supply of electricity and gasoline for production and business; have sanctions and regulations requiring the electricity sector to compensate enterprises when power outages cause damage to production.
The Government also urgently completes legal documents on import and export; implements fiscal and monetary policies to support businesses in handling the exchange rate issue between VND and USD, increasing supply, reducing costs and improving the competitiveness of Vietnamese goods.
On the other hand, strengthen market information, trade promotion; diversify import and export markets, especially import markets to minimize the impact of shocks from these markets. In addition, support businesses to effectively take advantage of opportunities and commitments from trade agreements to boost exports; strengthen propaganda on rules of origin and issuance of Certificates of Origin; focus on building the image of reputable Vietnamese export enterprises.
Along with the Government's solutions, export enterprises grasp market signals, maintain traditional markets, proactively seek orders, and open new markets.
Deputy Minister of Planning and Investment Tran Quoc Phuong said that ministries and localities also need to continue to speed up the effective disbursement of public investment capital. In particular, complete the detailed allocation of the state budget investment plan for 2024 in accordance with regulations, ensuring focus, key points, not spreading out, and in accordance with implementation capacity.
“Focus on investing in large projects, eliminate scattered investment, reduce project implementation time, promptly put projects into use, and improve the efficiency of public investment capital,” Deputy Minister Tran Quoc Phuong emphasized.
To create a breakthrough in attracting and disbursing FDI capital in 2024 of the economy, the Government has solutions to enhance the competitiveness of the investment and business environment, develop infrastructure, focus on improving the capacity of transport infrastructure, industrial infrastructure, technology, information and synchronous logistics.
At the same time, perfect the institutions, clear, public, transparent legal environment and clearly and simply regulate procedures related to land use rights; fire prevention and fighting. Along with that, there is a mechanism to encourage FDI projects to use environmentally friendly technology, self-produce and use renewable energy; train skilled and professional human resources with competitive salaries in the region and the world.
To control inflation according to the target, the Government and localities must ensure adequate supply with stable prices for food and foodstuffs; ensure national energy security, adjust electricity prices in accordance with the domestic economic situation, and publicly and transparently disclose electricity production costs.
In the second quarter and the remaining months of 2024, the pressure is very great. In order to proactively respond to the challenges in price management, Deputy Prime Minister Le Minh Khai has requested ministries, branches and localities to focus on implementing a number of key solutions. First of all, it is necessary to closely monitor domestic and foreign economic developments, forecast in detail and specifically the factors affecting the general price level, especially essential goods and services to proactively develop detailed scenarios for each industry and field, ensuring that they are close to reality, thereby advising, proposing and implementing appropriate, timely and effective price management solutions.
Regarding price adjustments for essential goods and services, the Deputy Prime Minister requested ministries and branches to calculate the appropriate timing for implementing the new wage policy, ensuring inflation control according to the set target.
Economist Nguyen Bich Lam said that the Government also implemented flexible fiscal and monetary policies to reduce inflationary pressure on the economy; flexibly adjusted exchange rates to stabilize prices of imported raw materials and improve the competitiveness of domestically produced products.
At the same time, assess the impact of increasing prices of healthcare and education services on inflation and economic growth to decide the level and timing of adjusting prices of services managed by the State, meeting the goal of controlling inflation and reducing negative impacts on people's living standards.
“Our country's economy in May 2024 may still maintain the recovery process, but it will still be slow, bumpy and uncertain,” economist Nguyen Bich Lam predicted.
According to VNA
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