Although the economy still faces many difficulties and challenges, the Government is determined to achieve the growth target of 6.5% this year.
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| According to the forecast of the Ministry of Planning and Investment, the processing and manufacturing industry will continue to recover positively. Photo: Duc Thanh |
Select scenario 6.5%
There have been two economic growth scenarios for 2024 updated by the Ministry of Planning and Investment, after the statistics on the socio-economic situation in the first quarter of 2024 were officially announced, with GDP growth in the first quarter estimated at 5.66%, higher than the scenario proposed in Resolution 01/NQ-CP of the Government.
In scenario 1, the economic growth for the whole year is expected to reach 6%, which is the lower limit of the target set by the National Assembly (6-6.5%). To achieve this figure, the last 9 months of the year must increase by about 6.12%, of which the growth in the second quarter is 5.85%, the third and fourth quarters are 6.22% and 6.28% respectively, reaching the lower limit or lower than the scenario set out in Resolution No. 01/NQ-CP.
In scenario 2, the economic growth for the whole year will reach 6.5%, the upper limit of the target set by the National Assembly. Accordingly, the growth rate in the last 9 months of the year must be about 6.75%; of which the growth rate in the second quarter is 6.32%, the third and fourth quarters are 6.79% and 7.08%, respectively. The growth rate in each quarter is about 0.1 percentage points higher than the upper limit of the scenario set out in Resolution No. 01/NQ-CP.
“The Ministry of Planning and Investment recommends choosing scenario 2. In the context of a more favorable change in the world and domestic situation, we will continue to research and implement new support policies on fiscal and monetary policies... to strive for the highest growth rate,” Minister of Planning and Investment Nguyen Chi Dung said at the regular Government meeting in March and the recent online Government Conference with localities.
Prime Minister Pham Minh Chinh then emphasized the requirement to perform at the highest and best level, striving to achieve and exceed the goals and targets in 2024, especially the growth target of about 6.5%.
The question is, can the economy achieve this figure? When recommending scenario 2, Minister Nguyen Chi Dung said that the Ministry of Planning and Investment based its decision not only on the results of the first quarter, but also on forecasts for the following quarters.
According to the forecast of the Ministry of Planning and Investment, the processing and manufacturing industry continues to recover positively, with orders increasing. This is a condition to further accelerate economic growth and achieve development goals in 2024, reducing pressure on 2025, the final year of implementing the 2021-2025 Socio-Economic Development Plan.
In fact, according to the survey results on business trends of enterprises in the processing and manufacturing industry in the first quarter of 2024, conducted by the General Statistics Office, 45.4% of enterprises assessed that the trend in the second quarter would be better than in the first quarter of 2024. Regarding orders, 42.2% of enterprises expected to have an increase in orders in the second quarter compared to the first quarter. Regarding export orders, 36.9% of enterprises expected to increase new export orders in the second quarter of 2024.
Thus, the trend in production and business is more positive. Similarly, the service and tourism sectors are also forecast to continue to recover in the following quarters. That is the basis for expecting that GDP growth in the remaining quarters of the year will continue the rule that each quarter is higher than the previous quarter, so that the whole year can reach the target of 6.5%.
No back down
The determination is great, but the difficulties are not small, when both the global and domestic economies contain risks. The World Bank (WB) recently released the East Asia and Pacific Economic Update Report, still maintaining Vietnam's growth forecast for 2024 at 5.5%.
Mr. Aaditya Mattoo, World Bank Economist for the East Asia and Pacific region, said that the WB based this figure on factors such as the potential for global trade recovery and Vietnam's own economic recovery. Mr. Aaditya Mattoo also mentioned difficulties in the real estate sector, as well as the lack of strong improvements in public investment disbursement.
Meanwhile, S&P Global has just announced that the Vietnam Manufacturing Purchasing Managers' Index (PMI), after a slight improvement in the first two months of the year, has returned below the 50-point threshold, reaching 49.9 points.
“Growth in Vietnam’s manufacturing sector slowed in March as weaker demand weighed on new orders and output. Weak demand was also reflected in the PMI survey’s price indices, with input cost inflation slowing and selling prices falling,” said Andrew Harker, chief economist at S&P Global Markets.
That is, from a certain perspective, the economic recovery is still uncertain and contains challenges. Speaking at the regular Government meeting in March 2024 and the recent Government online conference with localities, Minister Nguyen Chi Dung also pointed out the challenges, difficulties, and worrying points of the economy.
“Decreased purchasing power and people tightening spending show the cautious and frugal mentality of businesses and people in the face of current economic difficulties. Low domestic market demand and high competitiveness are the biggest difficulties facing processing and manufacturing enterprises at present,” said Minister Nguyen Chi Dung.
The Minister also mentioned that up to 74,000 businesses had to withdraw from the market in the first quarter; the real estate and bond markets were still facing difficulties; and the risks of inflation and exchange rates, to emphasize the difficulties of the economy.
“Continue to strongly promote and renew growth drivers in investment, consumption and export; make the most of new growth drivers from digital transformation, green transformation...”, Minister Nguyen Chi Dung said and affirmed that public investment disbursement must be considered an important political task to promote disbursement, thereby promoting economic growth.
In the first quarter of 2024, Ho Chi Minh City achieved a GRDP growth rate of 6.54%. This economic locomotive is determined to achieve a growth rate of 7.5-8% this year. "We will continue to be proactive, creative, and adapt flexibly, both promoting the disbursement of public investment capital and removing difficulties, promoting private investment, especially in the real estate sector, key projects, stimulating consumption and tourism to boost economic growth," said Mr. Phan Van Mai, Chairman of the Ho Chi Minh City People's Committee.
Meanwhile, Chairman of Quang Ninh Provincial People's Committee Cao Tuong Huy said that after achieving a GRDP growth rate of 8.8% in the first quarter, Quang Ninh will strive to achieve the double-digit growth target for the whole year. "We are determined to disburse 100% of public investment capital, of which 50% will be achieved in 6 months and 80% in 9 months, to promote economic growth," said Mr. Huy.
When determination reaches every ministry, sector and locality, the economy can achieve the growth level that the Government has chosen and determined to achieve.
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