Go all out for the finish line

Speaking with TG&VN, Director General of the General Statistics Office (Ministry of Planning and Investment) Nguyen Thi Huong emphasized that 2024 is a breakthrough year for the 5-year economic journey 2021-2025 and the service sector continues to be a bright spot.

Kinh tế Việt Nam năm 2024: Dốc toàn lực cho chặng đường về đích

Director General of the General Statistics Office Nguyen Thi Huong. (Photo: NVCC)

Vietnam's foreign direct investment (FDI) attraction in 2023 has an impressive increase. How do you evaluate this result?

As of December 20, 2023, the total newly registered, adjusted and contributed capital to buy shares by foreign investors reached over 36.6 billion USD, an increase of 32.1% over the same period in 2022. This is the year with the highest scale of implemented FDI capital ever.

This is also a very important driving force to promote Vietnam's economic growth in 2023 and the following years in the context of many difficulties and challenges facing the world economy as well as the domestic economy.

The continued flow of FDI capital into Vietnam affirms foreign investors' confidence in stable macroeconomic policies; open and safe investment environment; the Government and Prime Minister always accompany and support the business community to overcome difficulties, stabilize and develop production and business; many fiscal and monetary policies to support businesses have been effectively implemented.

These factors have positively impacted foreign investors in deciding to invest in new projects, as well as expand existing projects in Vietnam.

During the year, there were a number of projects with very high registered capital such as: Liquefied Natural Gas (LNG) Thermal Power Plant Project in Thai Binh from Japan; JINKO SOLAR Hai Ha Vietnam Photovoltaic Cell Technology Complex Project; Lite-on Quang Ninh Factory Project; LG Innotek Hai Phong Factory Project. These 4 major projects attracted nearly 5.2 billion USD during the year.

According to the General Statistics Office, total registered FDI capital in 2023 increased by 32.1% over the same period in 2022, which is the highest and most impressive increase since the Covid-19 pandemic appeared and broke out in 2020. This result is due to the investment environment always being improved, attractive with many outstanding advantages.

At the same time, in 2023, the economic diplomacy activities of the Party and Government will be strengthened, Vietnam has upgraded its Comprehensive Strategic Partnership with Japan and the United States, which is expected to bring a new wave of quality investment to Vietnam. This could be an optimistic trend and confidence that FDI capital flows into the country will continue to grow well in 2024 and the following years.

Besides, public investment has performed well as a source of seed capital, helping to attract high FDI throughout 2023.

In addition, Vietnam has participated in many Free Trade Agreements (FTAs) and has become a country that has signed FTAs with all major economic partners around the world such as: Japan, China, the US, the European Union (EU), Russia... These agreements create favorable conditions to promote the attraction of foreign investors to expand investment opportunities in the S-shaped country.

Can you elaborate on the growth picture for the whole year 2023?

In the context of an unstable and difficult world economy, with the participation of the entire political system, the Government and the Prime Minister have proactively, flexibly, resolutely, closely directed ministries, branches, and localities, together with the solidarity, trust, and support of the people and the business community, many solutions have been implemented to overcome difficulties, promote growth, maintain macroeconomic stability and major balances of the economy.

This will help accelerate the recovery process and enhance the economy's resilience to global challenges. Although there are still many difficulties, Vietnam's economy in 2023 has achieved positive results, showing that the economy continues to have a recovery trend with growth rates higher in each quarter than in the previous quarter.

In 2023, economic growth is estimated at 5.05% (specifically, the first quarter is 3.41%; the second quarter is 4.25%; the third quarter is 5.47% and the fourth quarter is estimated at 6.72%).

From the supply side , the agriculture, forestry and fishery sector continues to be the "support" of the economy, actively promoting the restructuring process to ensure food supply and security while achieving many positive results, creating stable growth in recent times.

The industrial sector has shown a positive recovery trend in the last months of the year, leading to a growth rate of 3.02% for the whole year. The construction sector has achieved remarkable growth due to the promotion of public investment disbursement, the prices of some key construction materials (iron, steel, cement, etc.) have cooled down after a long period of price increase, low interest rates and the attraction of foreign direct investment are bright spots.

Some market service sectors in the fourth quarter continued to maintain stable growth rates since the beginning of the year.

The continued flow of FDI into Vietnam affirms foreign investors' confidence in the country's stable macroeconomic policies. Image of Bac Tien Phong Industrial Park located in the Quang Yen coastal economic zone (Quang Ninh). (Source: Hateco)

From the demand side , in 2023, although consumption may not be as vibrant as before the pandemic, it will still be basically stable, reaching 3.52% for the whole year, contributing 2.07 percentage points to overall growth.

This steady increase is due to the fact that during the past summer and as the year gets closer, spending demand is also higher to meet the upcoming summer holidays, festivals, New Year and Lunar New Year. In general, consumer demand is still the main factor of economic growth.

Asset accumulation in 2023 is estimated to increase by 4.09%, contributing 1.35 percentage points to overall growth. This is due to the determination and efforts of the Government, ministries, branches and localities in drastically promoting the implementation of public investment capital, capital in the Recovery Program, urging the progress of projects to be completed soon to serve society, spreading the impact to economic sectors.

Furthermore, the preliminary trade surplus of about 28 billion USD has contributed positively to Vietnam's economic growth, contributing 1.63 percentage points to the overall growth of the economy.

What advantages and difficulties will the economy face in 2023 , madam?

Economic growth in 2023 is supported by a number of favorable factors:

Firstly, the stable macro-economy, effective combination of fiscal and monetary policies have helped control inflation in a safe zone, and the gradual decrease in operating interest rates is the basis for reducing lending interest rates to support production.

Second , the agricultural production sector continues to be the "support" of the economy, actively promoting the restructuring process, ensuring food supply and security while achieving many positive results, creating stable growth in recent times.

Third , the service sector is gradually recovering with tourism being a bright spot.

Fourth , industrial activities gradually recovered, the industrial production index has tended to increase slightly again.

Fifth , the Government's efforts to promote disbursement of public investment capital are an important driving force for growth.

Sixth , effectively controlled inflation will help stabilize cash flow, which is an important factor for economic growth.

In addition to favorable factors, some difficulties and challenges have hindered growth such as: geopolitical instability, world economic difficulties, weak recovery of aggregate demand; industrial production, although having positive changes, is still slow, has not created a strong acceleration compared to the same period in 2022, mainly due to a decrease in orders...

At the same time, import and export activities are recovering slowly due to reduced global demand, tight monetary policy and high inflation. The real estate market continues to be gloomy, with limited cash flow, especially in the context of high pressure on corporate bond maturity and repayment in 2023.

In addition, attracting foreign investment in 2023 has not been effective as investors have not expanded their investment scale in projects operating in Vietnam due to the general difficulties of the world economy in general and of the business community.

In 2023, economic growth is estimated to reach 5.05%. (Photo: VNA)

What is your assessment of Vietnam's economic growth in 2024 ?

It is forecasted that in 2024, potential risks from the global economic environment will still exist and continue to negatively impact Vietnam's economic growth recovery prospects. The consequences of the Covid-19 pandemic will still persist. Inflation in some major economies is likely to remain high due to continued tight monetary policies. Public debt will continue to increase.

The service sector is expected to remain a bright spot in 2024. Some commercial sectors can maintain growth momentum thanks to trade policies and promotion of domestic consumption such as: air transport, wholesale and retail, accommodation and catering services, financial services, tourism services...

At the same time, global trade growth continues to trend low, affected by tense and unpredictable geopolitical competition. Pressure from strong fluctuations in crude oil and food prices, prolonged interest rate increases in many countries, etc. The recovery of the global economy is unclear.

Domestically, although opportunities, advantages, difficulties and challenges are intertwined, traditional driving forces are still weak and new driving forces are unclear, so in 2024, it is forecasted that Vietnam's economy will still face many difficulties and challenges.

The impact of the global economic downturn that has accumulated since the pandemic will likely continue to impact Vietnam's economy at least in the first half of 2024 before receiving more positive and optimistic signs.

However, the economy will still have a chance to recover more positively if the support policies issued in 2023 have a clearer impact on the economy; the driving forces of investment, consumption, tourism and export continue to be strongly promoted; outstanding issues and long-standing shortcomings are focused on resolving and changing more positively in 2024, especially the problems of enterprises, investment projects, real estate market, corporate bonds, etc.

In the agriculture, forestry and fishery sector, positive growth will continue in 2023. The effectiveness of the agricultural development strategy and crop restructuring, both ensuring food supply and security and developing sustainable agriculture, exploitation and aquaculture, and agricultural, forestry and fishery production activities are forecast to continue to be stable.

The industrial and construction sector is forecast to continue to face many challenges in the context of a slow global economic recovery, weak world demand, a shrinking world market, and difficulties in the circulation and movement of world trade goods due to rising prices and scarcity of raw materials.

In particular, the domestic processing and manufacturing industry is still facing a decrease in orders and high input costs. The decline in the real estate market continues to affect many related manufacturing industries.

Besides, many public investment projects will be promoted in 2024, which will also contribute to our country's growth next year.

2024 is also the breakthrough year of the 5-year economic journey 2021-2025. Therefore, the Government, ministries, branches and localities will also devote all their efforts to this journey to the finish line. These may be subjective advantages but also great pressure on the country's economic activities.

In the context of global uncertainty, Vietnam needs to continue to maintain macroeconomic stability. This is an important foundation to achieve the expected growth target.

Thank you!

Source