The foundation of macroeconomic stability, removing difficulties, and timely support for internal bottlenecks of the economy will help Vietnam accelerate in the coming time.
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| Vietnam is currently one of the most dynamic countries in East Asia - Pacific. (Photo: Linh Chi) |
Assessing Vietnam's economy, the World Bank (WB) recently 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.
The WB emphasized: "Vietnam is currently one of the most dynamic countries in East Asia - Pacific".
Expected fastest growth in ASEAN
Analysis from the WB shows that 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.
Gross National Income (GNI) 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 had increased to 4,180 USD, 19 times higher.
Thanks to its solid foundation, the World Bank assessed that Vietnam's economy has shown remarkable resilience during times of crisis. The bank forecast that Vietnam's economic growth this year could reach 6.1% - higher than the 5.5% forecast made in April.
Not only the World Bank, UOB International Bank also believes that Vietnam's economic outlook in 2024 remains positive, with a forecast GDP growth rate of 6% and the potential to exceed this figure. This optimism is based on the strong performance of industries such as manufacturing, electronics, furniture and automobiles.
Meanwhile, in Savills' Asia-Pacific Investment Report for the first quarter of 2024, Mr. Troy Griffiths, Deputy Managing Director at Savills Vietnam, commented that Vietnam's economic prospects in 2024 are very positive and could enter the top 20 fastest growing economies globally.
HSBC also raised its 2024 GDP growth forecast to 6.5% (previously 6%), the fastest expected in ASEAN. Meanwhile, the ASEAN+3 Macroeconomic Research Office (AMRO) has adjusted Vietnam's 2024 GDP growth forecast to 6.3%.
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| Domestic demand will strengthen in the second half of 2024 as investor and consumer sentiment improves. (Source: Vietnam Insider) |
Steady growth momentum
At the announcement of the Review Report - Update on Vietnam's economic situation at the end of August 2024, Mr. Andrea Coppola, Chief Economist of the World Bank Vietnam, said that after a decline in 2023, since the beginning of this year, Vietnam has returned to high growth rates in some areas such as exports or industrial production, foreign direct investment (FDI) is also at a high level...
Regarding the economic opportunities in the last months of the year, under the condition that exports continue to grow and real estate shows signs of recovery, the WB believes that domestic demand will strengthen in the second half of 2024 when investor and consumer sentiment improves.
At the same time, the current account balance is forecast to remain in small surplus, while the Government is returning to consolidating the budget balance, while inflation is forecast to decline from 4.5% in 2024 to 3.5% in 2026.
Ms. Dorsati Madani, a senior economist at the World Bank, observed that Vietnam's recent growth has been reflected in all three groups: foreign direct investment, private investment, and public investment. The foundation of macroeconomic stability, the removal of difficulties, and timely support for internal bottlenecks in the economy will help Vietnam accelerate in the coming time.
She said the next important growth driver of the economy is exports, which are still maintaining a positive and proactive position.
The country's total export turnover by mid-August reached over 473 billion USD, with a trade surplus of nearly 15.5 billion USD. The industrial and manufacturing sectors also returned to growth.
Mr. Nguyen Bich Lam, former General Director of the General Statistics Office, assessed that the manufacturing and processing industry is promoting growth very well and regaining its role as the growth engine of the economy.
He believes that Vietnam's exports, consumption, inflation control, and macroeconomic stability will be more favorable in the coming time because they will be supported by positive external factors, such as the fact that the US Federal Reserve (Fed) is considering cutting interest rates in the coming time.
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| Since the beginning of this year, Vietnam has returned to high growth rates in a number of areas such as exports or industrial production, foreign direct investment (FDI) is also at a high level... (Source: Vietnamplus) |
Fundamental premise to become a developed country
Looking from the world, Economist, Dr. Vo Tri Thanh, observed that by the end of 2023, the world economy will still record a weak and uneven recovery among key economies. Production activities, from industrial output to investment and international trade activities, all decreased.
At the same time, rising geopolitical instability and slow inflation have forced most countries to continue tightening monetary policy. Many organizations forecast that the world economy will still recover weakly this year and next year and face many risks.
However, according to Dr. Vo Tri Thanh, for Vietnam, the country still maintains macroeconomic stability, inflation is not too high and the economic recovery rate is quite good. GDP in the second quarter of 2024 reached 6.93%, exceeding the scenario in Resolution 01 of the Government (5.5 - 6%). This makes international organizations clearly see the recovery potential and give more optimistic forecasts than the target set by Vietnam, with annual growth around 7%.
Dr. Vo Tri Thanh emphasized: "Vietnam's GDP growth shows that the size of the economy has become much larger, reflecting the recovery and a positive outlook on the economic outlook. It can be seen that the size of Vietnam's economy has increased more than 100 times in 4 decades, from 4 billion USD to 430 billion USD in 2023, putting Vietnam in the group of upper middle-income countries.
Stable development and attracting large investments will be the fundamental premise for Vietnam to achieve the goal of becoming a developed country by 2045."
However, difficulties remain. One of the main factors for economic growth is the uncertainty of global economic growth, which may be lower than expected, especially the growth of Vietnam's major trading partners such as the US, EU and China.
The World Bank recommends that Vietnam needs to boost public investment to both stimulate short-term demand and contribute to solving the problem of infrastructure shortage, especially in energy, transportation and logistics (which are bottlenecks hindering growth); banks need to improve capital adequacy ratios and improve infrastructure construction to attract private investment.
In addition, trade diversification to further enhance integration will be a factor that helps improve the resilience of the Vietnamese economy to external shocks. Only then will the economic recovery momentum be maintained, with growth in the third quarter of 2024 reaching the scenario of 6.5-7.4%, thereby creating a foundation for achieving and exceeding the socio-economic development target in 2024.
Source: https://baoquocte.vn/kinh-te-viet-nam-nam-2024-co-ly-do-de-but-toc-285120.html
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