Latest forecast for GDP growth this year

TPO - Vietnam's economy in the first half of this year continued to record many bright spots, creating the premise for the annual growth target of 6-6.5%. The latest forecasts from the International Monetary Fund (IMF) and many domestic and international organizations support this target.

Opportunity to "reach the finish line"

The IMF delegation has just finished its working trip to Vietnam, met with the Prime Minister, and discussed with many government agencies.

Assessing after the regular consultation, Mr. Paulo Medas - Head of the IMF's Vietnam Team - forecasts that Vietnam's GDP growth this year will reach nearly 6%, supported by continued strong external demand, stable foreign direct investment and easing policies. Inflation is expected to fluctuate around the target of 4 - 4.5%.

Vietnam is assessed to have made many important steps forward, resolving legal bottlenecks, supporting economic recovery, such as amending the Land Law and laws related to real estate, and the Law on Credit Institutions.

“A stronger legal framework to deal with insolvency and debt enforcement will accelerate corporate restructuring and make the financial system more stable. Vietnam also needs to make more efforts to restructure weak real estate businesses and promote a healthy corporate bond market,” Mr. Paulo Medas emphasized.

The IMF's new forecast for Vietnam's GDP growth is similar to the organization's most recent scenario. According to the IMF, Vietnam is expected to rank 20th in the world with a growth rate of 5.8% this year. This level is close to the Government's growth target of 6-6.5%.

Forecasts of some domestic and international organizations on Vietnam's GDP growth this year.

Forecasts from many domestic and international organizations also support this goal. According to credit rating agency Fitch Ratings, Vietnam's domestic fiscal and monetary policies have greatly supported the economy. Accordingly, Vietnam's economic growth is forecast to reach 6.3% this year.

Standard Chartered Bank forecasts Vietnam's GDP to grow by 6%, lower than the previously forecast 6.7%. UOB Bank (Singapore) forecasts Vietnam's economic growth in 2024 to reach 6%.

Research on extending support policy

The Asian Development Bank (ADB) forecasts Vietnam's economy to grow 6% in 2024.

Mr. Nguyen Ba Hung - ADB's chief economist in Vietnam - commented that this is a higher growth rate than the regional average. The economic recovery depends on synchronous policies such as domestic stimulus, public investment, and institutions.

According to ADB experts, Vietnam needs to have measures to reform business costs and create favorable conditions for enterprises.

“Vietnam has a very open economy, with a lot of exports and imports. The total import-export turnover is nearly double the GDP, so it is necessary to strengthen regional and international cooperation. Domestic demand is recovering but the speed is still slow. Domestic consumption demand depends a lot on domestic investment, public investment, and fiscal policy,” Mr. Hung analyzed and recommended that Vietnam needs to take measures to reform business costs and create favorable conditions for businesses. This is a policy requirement in the next 1-2 years, creating momentum for the economy to rebalance and increase demand.

This year's Vietnam Economic Annual Report by the Vietnam Institute for Economic and Policy Research (VEPR) forecasts two growth scenarios at 5.85% and 6.01%, respectively.

“Vietnam’s economy will grow by 6.01% under the condition that there is a policy to reduce the difference between domestic VND interest rates and strong foreign currencies in the international market, reduce the difference between VND and USD mobilization interest rates, and increase the net export component to reach 24 billion USD. Public and private investment growth will be better thanks to an improved investment environment and good control of inflation at 5%,” VEPR analyzed.

Dr. Nguyen Quoc Viet - Deputy Director of VEPR - said that in the short term, it is necessary to continue to prioritize fiscal policy with the support of monetary policy, focusing on promoting the efficiency of public investment disbursement in the remaining months of the year. At the same time, some policies to support businesses and people during the COVID-19 period for the period of 2024-2025 also need to be studied and extended; promoting aggregate demand in the economy and credit growth.

The Deputy Director of VEPR said that it is necessary to consider increasing the family deduction for calculating personal income tax; consider extending the current 2% value-added tax (VAT) reduction policy until the end of the year. Even if GDP growth in 2024 does not reach the target, aggregate demand continues to be weaker than expected, it is possible to consider extending the VAT reduction policy until June 2025 and increasing the VAT reduction rate to 3-4%.

Viet Linh

Source: https://tienphong.vn/du-bao-moi-nhat-ve-tang-truong-gdp-nam-nay-post1649968.tpo