Economy 2024: Race to the Finish Line

There are only a few more steps left for Vietnam's economy to reach the 2024 target. Time is running out, but efforts are still needed to achieve the best results.

The acceleration of the manufacturing sector is remarkable, with the industrial production index for 11 months increasing by 8.4% over the same period last year.

Growth star

Continuing the positive forecasts about Vietnam's economy, in a recently published report, HSBC Bank raised its forecast for Vietnam's economic growth in 2024 to 7%, instead of 6.5% as previously forecast.

This positive result, according to HSBC experts, was led by manufacturing, exports, and foreign direct investment. In particular, the acceleration of the manufacturing sector was remarkable, with the industrial production index for 11 months increasing by 8.4% compared to the same period last year. Meanwhile, imports and exports were also positive and especially foreign investment attraction was still increasing.

Emphasizing that this year is the third consecutive year that foreign investment disbursement has reached over 20 billion USD (in the first 11 months of this year, foreign investment disbursement was 21.68 billion USD - PV), HSBC experts forecast that investment capital flows into the manufacturing sector are likely to continue to grow.

Referring to Shunsin, a subsidiary of Foxconn, which is said to have applied for an investment license of 80 million USD to produce integrated circuits in Bac Giang province, as well as the interest of large corporations such as Google and NVIDIA in Vietnam, HSBC emphasized that “manufacturing capacity in Vietnam is improving”.

Because production capacity has been constantly increasing in recent years, trade in goods has always been a bright spot in Vietnam's economy. This year is no exception. According to the figures just announced by the General Department of Customs, as of December 15, 2024, the total import and export turnover of goods nationwide reached over 747.13 billion USD, an increase of 14.7%, equivalent to an increase of 95.98% in absolute terms compared to the same period in 2023. Of which, export turnover reached 385.35 billion USD, an increase of 13.9%, equivalent to an increase of 46.92 billion USD compared to the same period in 2023, getting closer and closer to the 400 billion USD milestone.

When production and exports are boosted, economic growth will be more positive. Many forecasts show that Vietnam's economic growth is almost certain to reach 7% this year. Mr. Luong Van Khoi, Deputy Director of the Central Institute for Economic Management (CIEM), also said that economic growth this year will have a big breakthrough, with a forecast of 7%, regaining the growth momentum as before the Covid-19 period.

“Compared to ASEAN countries, according to the International Monetary Fund (IMF) forecast in October 2024, Vietnam's economic growth is among the highest in the region,” said Mr. Luong Van Khoi.

In its latest report, Oxford Economics also said that Vietnam’s economic growth will be higher than the overall growth rate of the group of 6 largest ASEAN economies (ASEAN-6), perhaps not only this year, but also in the coming years. The research firm also mentioned “new winds” in the semiconductor chip manufacturing industry, artificial intelligence (AI)…, in addition to growth drivers such as manufacturing, export, consumption and trade.

The Last Jump

Although the forecasts for Vietnam's economy in 2024 are positive, to achieve the highest possible results, one of which is that GDP growth could reach over 7%, efforts are still needed in the "final leap".

In a recent interview with the press, Deputy Minister of Planning and Investment Tran Quoc Phuong said that when reviewing all growth drivers from now until the end of the year, he saw an opportunity to “further increase growth”. That is, the export market is currently relatively good, and “if we try a little harder, we can grow further”.

In the context of increasing external difficulties, boosting public investment and supporting fiscal and monetary policies are necessary measures to further stimulate domestic demand.

- ADB Bank commented when announcing the economic forecast for the Asia-Pacific region, including Vietnam

The same is true for attracting foreign investment, domestic investment and consumer motivation. “When the investment market in the world is gloomy, foreign investment in Vietnam is very good. This is what makes us confident to say that investment motivation is very positive, contributing to the overall growth of the year,” said Deputy Minister Tran Quoc Phuong.

The Deputy Minister also appreciated the improvement of domestic investment, when recently, the number of newly registered enterprises increased again, thereby demonstrating the business community's confidence in Vietnam's economic prospects. Meanwhile, regarding consumption motivation, it is possible to take advantage of people's spending opportunities during Christmas and New Year to promote the growth of domestic consumption.

Not only domestic consumption, but the fact that in November 2024 alone, there were more than 1.5 million international visitors to Vietnam is also a positive sign. If December makes more efforts to welcome 2 million visitors, the whole year can reach the target of 18 million international visitors. And when both the service sector and domestic consumption improve, it will contribute to "increased growth".

Furthermore, public investment disbursement is also one of the important growth drivers. There are no figures for 12 months yet, but in 11 months, the rate of public investment disbursement was 60.43% of the plan assigned by the Prime Minister. Of which, the disbursement of capital for tasks and projects under the Socio-Economic Recovery and Development Program alone reached more than 87% of the plan.

Unlike other economic indicators, which are finalized at the end of the year, the finalization date for public investment disbursement will be January 31, 2024 (the end date of the 2024 budget year). Therefore, there is still more than 1 month to "run... the deadline". If the disbursement effort reaches 95% of the plan in the total resources of 670,000 billion VND in 2024, as the Government's target, it will actively support economic growth.

Not only "further stimulating domestic demand", but boosting public investment not only contributes to promoting economic growth in the short term, but also creates a foundation for economic growth and development in the following period.

Source: https://baodautu.vn/kinh-te-2024-chang-dua-ve-dich-d233797.html