Suggesting more solutions to increase GDP by over 8%

Highly agreeing to adjust the GDP growth target for 2025 to 8% or more, National Assembly delegates suggested more immediate solutions, such as higher credit growth, or calculating economic stimulus packages, continuing to exempt and reduce taxes and fees in a number of areas.

Highly agreeing to adjust the GDP growth target for 2025 to 8% or more, National Assembly delegates suggested more immediate solutions, such as higher credit growth, or calculating economic stimulus packages, continuing to exempt and reduce taxes and fees in a number of areas.

Increasing public investment is one of the driving forces for economic growth this year. Photo: Duc Thanh

Increase public investment by VND 84,300 billion

Preparing to be submitted to the National Assembly at the 9th Extraordinary Session (opening on February 12), the Government's supplementary project on socio-economic development in 2025 with a growth target of 8% or more was examined by the National Assembly's Economic Committee last weekend.

Briefly presenting the Project, Deputy Minister of Planning and Investment Tran Quoc Phuong stated that, with the special significance of 2025, the country's GDP growth needs to reach 8% or more, contributing to creating a solid foundation to achieve double-digit growth rates for a long enough period (starting from 2026).

According to the report, the Government submitted to the National Assembly for consideration and comments on adjusting the growth rate of gross domestic product (GDP) to 8% or more, and the average growth rate of the Consumer Price Index (CPI) to about 4.5-5%.

If necessary, allow the state budget deficit to be adjusted to about 4-4.5% of GDP to mobilize resources for development investment. Public debt, government debt, and foreign debt may reach or exceed the warning threshold (about 5% of GDP).

The Government has also calculated a growth scenario of 8% or more in 2025, with economic sectors growing about 0.7-1.3% higher than in 2024; with industry - construction, especially the processing and manufacturing industry continuing to be the driving force for growth.

Deputy Minister Tran Quoc Phuong informed that the total social investment capital is about 174 billion USD or more, approximately 33.5% of GDP (higher than 3 billion USD), of which public investment is about 36 billion USD (equivalent to 875,000 billion VND, about 84,300 billion VND higher than the assigned plan for 2025 of 790,700 billion VND).

The Government's report also emphasized 6 main groups of tasks and solutions to realize the new growth target, such as perfecting institutions and laws, clearing and effectively using public investment resources, promoting private investment and processing and manufacturing industries, etc.

Chairman of the Economic Committee Vu Hong Thanh said that according to the Government's assessment, the results of implementing the socio-economic targets in 2024 are very positive, which is the basis for achieving higher growth this year. 2025 is also the year of acceleration towards the finish line, and the successful completion of this year's targets will make up for the previous years.

But, according to Mr. Thanh, besides the advantages, there are also many difficulties, which need to be assessed to find new opportunities for growth of 8% or more. "The Government has submitted a proposal to adjust the target in the spirit of innovation, growth of 8% or more, CPI at 4.5-5%, so what measures are there to control inflation? It may be necessary to mobilize more resources, then the public debt ceiling must be loosened, foreign debt is at the warning threshold of about 5% of GDP, so what additional tasks and more drastic solutions are needed?", Mr. Thanh raised the issue that needs to be discussed.

What to do to increase GDP by 1%

What practical solutions are needed so that GDP can increase by 1% compared to the target assigned by the National Assembly (about 6.5-7%) is also a question raised by many delegates at the verification session.

According to delegate Trinh Xuan An, Standing Member of the National Assembly's Defense and Security Committee, many solutions in the report reiterate solutions in the 2025 Socio-Economic Development Plan approved by the National Assembly at the 8th Session (late 2024). "We should choose solutions that really need priority to achieve the growth target of 8% or more to submit to the National Assembly," Mr. An suggested.

Suggesting the first solution is “where is the money”, delegate An said that it is possible to raise the credit growth target to 18-20% (currently the State Bank sets a credit growth target of about 16% - PV).

“The new government has generally stated that it will manage credit growth appropriately, promptly, and effectively to meet the capital needs of the economy. In my opinion, it must be very specific and the level of credit growth needs to be quantified to push more capital into the economy,” said Mr. An.

In addition, according to delegate An, in case it is necessary to mobilize resources for development investment, public debt, government debt, and foreign debt may reach or exceed the warning threshold (about 5% of GDP), it is necessary to clarify the debt repayment capacity so that delegates can confidently press the button.

Agreeing with delegate An, delegate Hoang Minh Hieu, Standing Member of the National Assembly's Law Committee, said that the Project should only be refined and focused on new solutions that are suitable for the new context that has emerged since the end of the eighth session of the National Assembly. "The solution needs to be specific, not general, like 'promulgate soon, complete soon'. It needs to be a highly practical solution," said Mr. Hieu.

Agreeing with the view that institutional improvement is one of the important solutions to achieve the goals of the Project, Mr. Hieu emphasized that to achieve this goal, the Project needs to propose specific solutions to prioritize resources for institutional improvement, including resources in terms of time, human resources and other conditions, especially the need to enhance the scientific nature of law-making, ensuring that policy and legal solutions meet the requirements of promoting socio-economic development to achieve the goals set for 2025.

Standing member of the National Assembly's Economic Committee, delegate Phan Duc Hieu expressed his concern when it was unclear which solution was the most important to increase GDP by 1%. Mr. Hieu analyzed that, in theory, countries will have stimulus packages, so does our country need this package? If so, according to Mr. Hieu, this package should focus on exports, tourism and consumption. In addition, Mr. Hieu said that tax reduction is also a very effective stimulus package. "The upcoming ninth session will pass a number of amended tax laws in the direction of increasing taxes, so should we consider temporarily suspending tax increases and further reducing some taxes and fees for some areas?" Mr. Phan Duc Hieu suggested.

Responding to the delegates' opinions, Deputy Minister Tran Quoc Phuong said that the construction of the Project in the context of "running and queuing at the same time" still had shortcomings as the delegates commented.

Regarding the key solution to achieve the growth target of 8% or more, Mr. Phuong said that if public investment is about 84,300 billion VND higher, GDP will increase by about 0.64%. "The money is there, the address is there, this more than 84,000 billion VND is new compared to the National Assembly's resolution on the 2025 Plan," Mr. Phuong said.

Regarding suggestions on tax policies, the leader of the Ministry of Planning and Investment said that the Prime Minister has directed a review of tax and fee exemption and reduction policies (most of which will end at the end of 2024), and a report in the first quarter of 2025 on which ones need to be maintained for extension. "There may not be a stimulus package, but there is a stimulus policy," Mr. Phuong responded to the delegate's suggestion.

Regarding the viewpoint of increasing credit growth, Deputy Minister Phuong said: “This is a very sensitive issue, just increasing by 1% is very worrying about the risk of inflation. The requirement is to provide enough capital for the economy, but how much is enough needs to be managed flexibly so as not to affect inflation too much,” Deputy Minister Phuong added.

In conclusion, Chairman of the Economic Committee Vu Hong Thanh summarized that the opinions at the review session were in high agreement with the growth target of 8% or more in 2025. Mr. Thanh suggested that the Government absorb the opinions at the meeting, complete the dossier and submit it to the National Assembly for consideration and decision.

Reviewing the pre-feasibility study report of the railway project over 8.3 billion USD

Also in the meeting last weekend, the National Assembly's Economic Committee reviewed the pre-feasibility study report of the Lao Cai - Hanoi - Hai Phong Railway Construction Investment Project. This is an important national project, with a main line length of 390.9 km21 and 3 branch lines of about 27.9 km, passing through 9 provinces and cities. The total preliminary investment is about 203,231 billion VND (equivalent to 8.369 billion USD). All opinions participating in the review agreed with the necessity of investing in the Project and pointed out a number of regulations that need to be completed, especially on specific mechanisms and policies, before submitting to the National Assembly.

Source: https://baodautu.vn/goi-mo-them-giai-phap-de-gdp-tang-tren-8-d244920.html