The economy is growing, forecast to reach about 6%

Prof. Dr. Hoang Van Cuong, member of the National Assembly's Finance and Budget Committee, said that in the first months of 2024, production and business activities will continue to grow from the fourth quarter of 2023 and many positive factors will appear.

Due to continuing to face many difficulties, including new ones, this year's economic growth is forecast to reach about 6%.

Prof. Dr. Hoang Van Cuong, Member of the National Assembly's Finance and Budget Committee

Tomorrow (May 23), the National Assembly will discuss in groups the additional assessment of the results of the implementation of the Socio-Economic Development Plan and the State Budget for 2023; the implementation situation in the first months of 2024. How do you personally evaluate the results achieved in the first months of this year?

In the first months of this year, production and business activities continued to recover from the fourth quarter of 2023 on all "fronts", with each month tending to be better than the previous month. For example, the Industrial Production Index (IIP) in April 2024 increased by 0.8% compared to March and increased by 6.3% compared to the same period in 2023, thanks to which, the IIP in the first 4 months of the year increased by 6%, of which the processing and manufacturing industry increased by 7% compared to the same period last year (in the same period in 2023, the processing and manufacturing industry decreased by nearly 3%).

Another bright spot is FDI attraction. In the first 4 months of this year, Vietnam attracted 9.27 billion USD, up 4.5%, of which newly registered FDI capital reached 7.11 billion USD, with about 970 projects, an increase of over 73% in capital and nearly 29% in the number of projects compared to the first 4 months of 2023.

Import and export activities are also a bright spot with a total turnover of 238.88 billion USD in the first 4 months of the year, an increase of over 15%, of which exports increased by 15%; imports increased by 15.4%. For our country's foreign trade activities, exports and imports are like the legs of the human body, this year we are very happy that the "legs" are moving very steadily, signaling the trend of exports and imports continuing to grow sustainably.

Disbursement of public investment capital is also considered a bright spot, sir?

In the first 4 months of the year, according to the Ministry of Finance, the total disbursed public investment capital reached about 115,907 billion VND, equivalent to 16.41% of the plan; reaching 17.46% of the task assigned by the Prime Minister. In terms of absolute numbers, disbursement speed as well as compared to the plan and tasks, it can be said that this year's public investment disbursement is the best in many years. This is a very important growth driver.

But the growth momentum must rely on the production and business activities of the enterprise sector?

That's right. For the economy to develop, it must rely on production and business activities. Production and business can only develop when there is a consumer market. Therefore, to increase GDP, it is often necessary to stimulate consumer demand.

Promoting public investment is not simply stimulating investment demand, but in essence it is still stimulating consumption demand. For example, the State spending 100,000 billion VND on infrastructure investment will lead to the development of a series of other production sectors, such as mining construction materials, stone, sand, bricks, gravel; production of civil electricity, sanitary equipment; transportation... These production activities are undertaken by the private sector. The State pumping money through public investment will create motivation for the private sector to invest capital, thereby creating jobs and income for workers. When workers have enough jobs and income, demand will increase. Thus, public investment is one of the forms of stimulating both private sector investment and social consumption demand.

In economic theory, public investment plays an important role, not only contributing directly to GDP, but also creating positive effects to promote private investment development through the infrastructure system. By investing in infrastructure, improving traffic routes and investing in education and health care to improve the quality of resources, public investment has shown a particularly important role for the economy.

With the current favorable developments, in your opinion, will this year's GDP growth rate reach 6.5% as the high target set by the National Assembly?

In 2024, the National Assembly set a GDP growth target of 6.0 - 6.5%. In the first quarter of this year, GDP increased by 5.66% - the highest growth rate since 2020 and, as a rule, except for rare sudden events such as the Covid-19 pandemic, growth in the following quarter is usually higher than the previous quarter. I think it is a bit difficult for GDP growth this year to reach the upper limit of the target (an increase of 6.5%), but it is likely to grow by around 6%.

It can be seen that although the economy is on the rise, it is not easy to achieve the 6.5% growth target, as it continues to face many difficulties, including new ones, such as the US-China trade war, which has recently flared up again after a period of lull.

In addition, domestic consumption has yet to recover to pre-Covid-19 levels. According to the General Statistics Office, in the first four months of this year, total retail sales of goods and consumer service revenue increased by only 8.5%, much lower than the same period in 2023 (up 13.3%) and the average growth rate of the years before the pandemic (about 11%/year). The lowest credit growth rate ever, despite low lending interest rates, shows that business investment demand is very low.

Private sector activities are also a topic that many National Assembly deputies will be interested in when discussing the socio-economic situation, as in the first four months of this year, an average of 20,300 businesses entered the market each month, while 21,600 businesses withdrew from the market, larger than the number of new entrants.

Source: https://baodautu.vn/kinh-te-vao-da-tang-truong-du-bao-dat-khoang-6-d215699.html