At the Vietnam Economic Scenario Forum 2024 held on January 11, domestic and foreign economic experts made comments on economic growth in 2024 and recommendations. Thoibaonganhang.vn recorded the experts' opinions on this issue.
2023 - a resilient year for Vietnam's economy
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Mr. Nguyen Duc Hien, Deputy Head of the Central Economic Commission:
Promote mechanisms and policies to create new growth drivers
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| Mr. Nguyen Duc Hien: Deputy Head of the Central Economic Commission |
In my opinion, in the coming time, we need to motivate private investment through investment stimulus activities. Currently, special mechanisms and policies for the private economic sector still have many barriers, and policies have not been put into practice.
Promoting mechanisms and policies to create new growth drivers for the economy is extremely important. The characteristics of Vietnam's economic growth depend heavily on the FDI sector and exports, especially in the processing and manufacturing sector. Resolution 29 issued in 2022 by the 13th Central Economic Committee set out long-term orientations for industrialization and modernization. The Resolution sets out many programs and tasks such as building and enhancing Vietnam's production, design and manufacturing capacity (Make in Vietnam).
However, we need to see what these mechanisms and policies have done and how far they have gone. We also set goals for mechanisms and policies to promote 6 fundamental industries. One of the industries that has many advantages when we establish a comprehensive strategic partnership with the United States is the digital technology industry, including the semiconductor industry. So what is the policy and how to implement the policy mechanism?
Also in the industrial sector, the Politburo issued Resolution 52 (issued in September 2019) on policies and strategies to proactively participate in the fourth industrial revolution, which sets out the important task of issuing policy mechanisms to promote smart manufacturing. This story also needs to be viewed in terms of industrial growth.
In my opinion, the service industry this year has made a significant contribution to economic growth, reaching an increase of 6.82% - a large contribution to the added value of GDP. In particular, in 2023, Vietnam tourism welcomed 12.6 million international visitors. This number is 3.4 times higher than in 2022, far exceeding the target of 8 million visitors. However, this number is only 70% of 2019 - the year before the Covid-19 pandemic. At this time, the question is what mechanisms and policies are needed to increase the real value of the service industry, as well as promote service industries to play an important role in the economy, including some areas where we are having recovery policies but are still facing difficulties, such as real estate...
This year, we have a trade surplus, but partly due to a sharp decrease in imports, while the import structure is raw materials for domestic production. The sharp decrease in imports demonstrates the internal strength of the economy, factors that are posing many problems. Exports in 2023 achieved many achievements, but increased mainly with China, while major markets such as Japan, the EU, the United States, etc. all decreased while we have basically participated in international commitments. So, how far have FTAs and new markets been exploited, and what policies have been put in place for this issue?
In my opinion, there needs to be a real policy to stimulate investment, especially private investment. We need to look frankly at the policy for private investment and the state sector. Except for oil and gas projects with the Government's determination, state-owned enterprises have no new investment. They are stuck on policies to promote their own investment.
Therefore, the problems with the Budget Law need to be resolved and shared. Even public investment needs to be evaluated and recognized. The World Bank has recommended that in Vietnam's public investment, it is necessary to consider focusing on investment in science and technology, digital transformation in addition to investment in infrastructure. Because investment in technology infrastructure and education is not much.
Stimulating consumption is also an issue that needs to be discussed. Near Tet, shopping spending is also quieter than last year, while deposits increased by 13.5 million billion VND... There needs to be a mechanism to put this cash flow into production and investment for development...
Dr. Can Van Luc, Member of the National Monetary and Financial Policy Advisory Council:
2024, stimulate growth but don't worry too much about inflation
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| Dr. Can Van Luc, Member of the National Monetary and Financial Policy Advisory Council. |
To create growth momentum for 2024, in my opinion, it is necessary to consolidate and renew existing growth drivers, focusing on restructuring the economy after a long period of decline due to the pandemic and delays in handling weak businesses and projects.
More importantly, promote and exploit new growth drivers, with the emphasis on accelerating the process of institutional improvement, especially guiding the implementation of laws on land, housing, real estate business, credit institutions, other amended laws, and support mechanisms in the context of applying global minimum tax...
In my opinion, we need to have a legal framework soon for new economic models and new businesses to be faster. Now, if we want to develop science and technology, try new things, and develop new models, we need to have a testing mechanism to do so.
In addition, it is necessary to soon develop a project to improve national labor productivity, strengthen training of high-quality human resources, create a more open environment to promote innovation, and establish a National Productivity Committee to provide clear direction, mechanisms, and policies for implementation.
Promote green growth; issue complete and timely documents guiding the implementation of the Law on Environmental Protection 2020; have specific plans to respond to climate change; implement the Green Growth Strategy, the Circular Economy Development Project, and commit to "Zero carbon" by 2050...
Vietnam has a very good strategic orientation, but the problem is that there is a lack of specific projects, programs, and solutions for each industry and field. In particular, standards and criteria related to green projects and green fields must also be promoted more.
We need to increase the autonomy, self-reliance and resilience of the economy in the fragile external context, both for businesses and localities. In addition, we need to focus on building, managing and exploiting national information and data bases in each field, industry, locality, organization, and enterprise, along with mechanisms for connecting, sharing and managing data risks...
Ms. Dorsati Madani, Senior Economist of the World Bank (WB) in Vietnam:
Vietnam needs to change to restore private economy
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| Ms. Dorsati Madani, Senior Economist, World Bank |
The world economy is facing overlapping crises, namely the economic crisis, the Russia-Ukraine conflict, inflation... The WB forecasts that the economy will continue to face many difficulties, such as declining consumption, governments increasing savings after many years of significant use of capital and budget. In addition, the policy environment will also have changes. Currently, the interest rate environment is high and shows no signs of decreasing.
In my opinion, economic growth in Europe has not improved significantly yet, while China is growing slowly due to internal problems such as the real estate market, although the authorities are trying very hard to revive the economy. All of these will have a profound impact on a highly open economy like Vietnam.
In Vietnam, we see that private investment is at a very low level. Along with that is a slowing trend in consumer spending. These are factors that need time to recover. In addition, the real estate market is also facing many difficulties. Therefore, many policies are needed to support these areas.
I think Vietnam needs to change to restore the private economy, along with gradually restoring domestic consumer spending. In addition, besides international trade, domestic trade must also be promoted.
In the coming time, commodity prices may not increase, or even decrease, and inflation in Vietnam and the world will decrease. These are factors that will change the economic outlook of Vietnam and the world.
We expect a gradual and gradual recovery to pre-pandemic levels. But this will require wise policy management. The private sector and local businesses in Vietnam need to be given more attention and development.
In addition to private economic recovery policies, Vietnam continues to focus on green transformation and digital transformation because this is an inevitable global trend in the coming time.
We recommend policy tools on taxes and green credits to support industries, gradually eliminating the use of coal and switching to clean energy such as wind and solar.
In the financial sector, the Government needs to promote green financial instruments such as green bonds and not only apply them to small businesses.
Banks must also have an action plan to support the Government’s green strategy. In addition, raising awareness among people and businesses also needs to be focused on.
I believe that the future of Vietnam is digital and green transformation. And to achieve that future, you need to have appropriate macroeconomic policies. Another important thing is that the people, the young generation and the working generations must also have the necessary knowledge about this trend.
Mr. Suan Teck Kin, Head of Global Market and Economic Research, UOB Bank in Vietnam:
Vietnam's economic growth forecast for 2024 is 6%
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| Mr. Suan Teck Kin, Head of Global Markets and Economics Research, UOB Bank |
In my opinion, Vietnam's economic growth in 2024 is promising thanks to expectations of Fed rate cuts, export recovery and stable growth in the region...
Some key growth drivers such as exports and FDI attraction are forecast to have bright prospects in 2024.
Vietnam is well positioned to continue attracting foreign direct investment (FDI). In Southeast Asia, Singapore has always been the leader in attracting FDI, followed by Indonesia and third is Vietnam.
Currently, Vietnam has the advantage of a young workforce that absorbs technology quickly. However, it is necessary to exploit other competitive advantages because Vietnam will soon have to face an aging population. Specifically, Vietnam should identify the areas of strength it wants to focus on attracting FDI, from which it will have appropriate strategies and solutions.
In the medium and long term, Vietnam needs to improve its productivity and efficiency. In Singapore, the government holds annual discussions to find solutions to improve labor productivity, thereby enhancing the country's competitiveness. This is an experience that Vietnam can learn from.
Regarding public investment, Vietnam's government spending structure is still at a reasonable level, focusing on infrastructure, with public debt at about 34% of GDP, creating plenty of room for Vietnam to expand fiscal policy.
To improve the country's competitiveness, it is recommended that Vietnam invest more in education and science and technology. Currently, Vietnam is one of the countries that spends little budget on education, retraining, and training to improve the skills and expertise of workers.
I think Vietnam's economic growth will be at 6% in 2024.
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