Economy accelerates, waiting for good news at the end of the year

GDP grew by 7.4% in the third quarter and is expected to reach 7.6-8% in the fourth quarter of 2024. Overcoming difficulties after the historic typhoon Yagi, Vietnam's economy may welcome good news of high growth at the end of the year.

Promoting industrial production is an important driving force for economic growth in the coming time. Photo: Duc Thanh

Joy after the storm and the Prime Minister's thanks

After worries about the economic slowdown due to the impact of the historic typhoon Yagi, joy came when data from the General Statistics Office showed that GDP growth in the third quarter reached 7.4%, bringing the growth rate for the first 9 months to 6.82% - not too far from the 7% threshold.

The 7.4% growth rate in the third quarter is not only 0.7 percentage points higher than the scenario in Resolution No. 01/NQ-CP (6.7%), but also equivalent to the full-year growth scenario of 7% as reported by the Ministry of Planning and Investment at the regular Government meeting in June 2024.

At the Government's online conference with localities and the regular Government meeting in September 2024, Minister of Planning and Investment Nguyen Chi Dung happily announced this data. Prime Minister Pham Minh Chinh praised and said "thank you" to the localities for their efforts to overcome the storm.

Statistics show that in the first 9 months of 2024, many localities had high GRDP growth rates. In particular, Bac Giang (13.89%), followed by Thanh Hoa (12.46%), Lai Chau (11.63%), Ha Nam (10.89%)... Even some localities heavily affected by storm No. 3 still maintained high growth momentum, such as Hai Phong (9.77%), Quang Ninh (8.02%), Phu Tho (9.56%), Lao Cai (7.71%), Cao Bang (7%), Yen Bai (7.15%)...

“In the first 9 months, Bac Giang’s socio-economic situation has maintained a positive growth rate. High growth in industrial production has contributed to promoting the province’s economic growth,” said Mr. Nguyen Van Gau, Secretary of the Bac Giang Provincial Party Committee.

Meanwhile, despite being praised by the Government for maintaining growth momentum, Mr. Nguyen Van Tung, Chairman of Hai Phong City People's Committee, is still worried about two "bad indicators" in the city's socio-economic development. That is, GRDP growth only reached 9.77%, lower than the set target.

“That is due to the impact of the storm. We need to strive harder,” Mr. Tung said, mentioning another “bad indicator” that the disbursement of public investment capital has only reached 52% of the planned capital assigned by the Prime Minister.

In fact, this is a “bad indicator” from the perspective of Hai Phong people. Compared to the national average, these are still quite positive numbers, especially in the context that Hai Phong is one of two localities heavily affected by Typhoon Yagi.

Thanks to the efforts of localities such as Hai Phong, Bac Giang, including Quang Ninh, Lai Chau..., the economic growth in the third quarter still reached a high rate (7.4%), bringing the GDP growth in the first 9 months to 6.82%. That is, contrary to previous concerns that the impact of the storm could reduce GDP growth in the third quarter by 0.35 percentage points, and in the first 9 months by 0.12 percentage points, the economy is still on track.

When announcing the socio-economic situation in the third quarter and the first nine months, the General Statistics Office explained that the damage to infrastructure, which as of September 27, amounted to VND81,500 billion, was only calculated in the change in economic assets, not in production activities during the period, so the impact on GDP growth was not large. Moreover, very quickly after the storm, production activities recovered, bringing the growth of the industrial sector to a high level, compensating for the damage and slowdown of the agricultural, forestry and fishery sectors.

Race to the finish line

The economy has overcome difficulties to accelerate in the third quarter and that is an important foundation for the economy in 2024 to reach the finish line with a growth rate of up to 7%, exceeding the set target and completing all 15/15 socio-economic development targets of 2024.

At the Government Conference with localities and the regular Government meeting in September 2024, Prime Minister Pham Minh Chinh directed that we must strive to achieve a growth rate of over 7% for the whole year, with growth in the fourth quarter reaching 7.5-8%. This is also the economic scenario for 2024 that the Ministry of Planning and Investment has just updated.

In the first 9 months of 2024, many localities had high GRDP growth rates. In which, the leading one was Bac Giang (13.89%), followed by Thanh Hoa (12.46%), Lai Chau (11.63%), Ha Nam (10.89%)...

The question is, can the economy achieve this goal?

Discussing the opportunities for the economy in the fourth quarter and the first months of 2025, Mr. Luong Van Khoi, Deputy Director of the Central Institute for Economic Management (CIEM), said that the impact of Typhoon Yagi on the economy in the third quarter is not much, but may be in the fourth quarter and next year. Because the localities affected by the storm, such as Quang Ninh and Hai Phong, are all key industrial provinces.

The difficulties are real, especially when the damage to machinery, equipment, crops, aquaculture cages, etc. is huge.

However, in a report published a few days ago, titled “Asian Economics Quarterly – The Race to the Finish Line”, HSBC Bank forecast that Vietnam’s economy will still achieve a growth rate of 6.5% this year, despite the damage caused by Typhoon Yagi. This is the most optimistic forecast about Vietnam’s economy among international organizations, including the WB, ADB, IMF…

According to HSBC, the aftermath of Typhoon Yagi could last for many more weeks, but “potential positives could offset the temporary economic losses caused by Typhoon Yagi”.

Those “potential positive possibilities” could be the efforts of economic locomotives such as Hanoi and Ho Chi Minh City, or the breakthrough of industrial production, or the disbursement of public investment.

“We have identified key tasks and solutions for the last 3 months of the year. In particular, we will focus on public investment disbursement and promoting growth to achieve the year’s target,” said Mr. Phan Van Mai, Chairman of the Ho Chi Minh City People’s Committee.

As an economic locomotive, the GRDP growth of this city only reached 6.85% in the first 9 months of the year, not high compared to the GRDP growth of other localities in the country. Meanwhile, Ho Chi Minh City contributes 20% of the country's GDP. Therefore, the economy is waiting for a breakthrough of Ho Chi Minh City.

According to Mr. Phan Van Mai, the City is actively implementing solutions to achieve GRDP growth of 7.5% this year and is expected to reach 8-8.5% next year.

The Prime Minister also considers public investment disbursement a key solution for the economy to achieve the growth target of 7% and higher this year.

“We must promote the activities of the Prime Minister’s working groups and 26 working groups of Government members working with localities immediately after the meeting. Speed ​​up the progress of important and key national projects and works; expressway systems; prepare for investment in important railway projects…”, the Prime Minister directed.