Positive signals for economic growth

The year 2024 is of key significance in the socio-economic development plan for the entire 2021-2025 period, requiring ministries, branches and localities to resolutely and synchronously implement policies and solutions on taxes, fees, currency, trade and investment to promote rapid recovery of production and business, create jobs and livelihoods for people.

Construction of Bien Hoa-Vung Tau expressway project. (Photo: DUY LINH)

Continuing the recovery momentum from the end of 2023, Vietnam's economy showed signs of improvement in the first month of the new year 2024 with statistical indicators in many industries and fields showing significant improvement.

A strong economy overcomes difficulties

Entering 2024, the manufacturing industry received good news when the Purchasing Managers' Index (PMI) returned to the threshold of over 50 points for the first time after four consecutive months of decline. The Purchasing Managers' Index (PMI) report for January 2024 showed that the PMI index of the Vietnamese manufacturing industry reached 50.3 points, up from 48.9 points in December 2023. This index reflects the "health" of the manufacturing industry has improved when output and the number of new orders increased again.

Sharing at a recent workshop on Vietnam's economic prospects in 2024, Mr. Truong Van Cam, Vice President and General Secretary of the Vietnam Textile and Apparel Association (VITAS), said that member enterprises have begun to receive orders again, although prices have not improved.

In addition, the lending interest rate has decreased significantly, helping to reduce the pressure on interest costs; the Government's business support policies extended in 2024 are also positive factors supporting the textile and garment industry to set a target of 44 billion USD in export turnover in 2024, an increase of 9.2% compared to 2023 and equivalent to the highest export turnover result of the industry in 2022.

The return of growth in this key export sector also reflects the overall positive atmosphere of the entire industrial production sector. According to the General Statistics Office, in January 2024, the industrial production index (IIP) increased by 18.3% over the same period, of which the processing and manufacturing industry increased by 19.3%, contributing 15.1 percentage points to the overall increase.

Notably, the industrial production index in January 2024 compared to the same period last year increased in 60 localities and decreased in only 3 localities nationwide. Regarding the investment situation, the total registered foreign investment (FDI) in January 2024 increased sharply by 40.2% over the same period, the realized capital reached 1.48 billion USD, an increase of 9.6%, which is a signal that our country is taking advantage of opportunities from foreign affairs and diplomatic achievements in 2023.

Import and export of goods achieved a growth rate of nearly 38% over the same period; the trade surplus of 2.92 billion USD also showed a positive signal after a long period of businesses struggling due to lack of orders. It is expected that public investment activities in 2024 will also be more vibrant thanks to the close direction of the Government and the Prime Minister. Problems and difficulties in each industry, each field and each stage of public investment projects have been identified and solutions have been found. As a result, in January 2024, public investment disbursement reached 16,900 billion VND, equal to 2.58% of the plan assigned by the Prime Minister, higher than the same period in both relative and absolute numbers.

Positive signals for economic growth

Manufacturing ultra-precision mechanical components at Fujikin Co., Ltd. (VSIP Bac Ninh Industrial Park). (Photo: DANG KHOA)

Promote institutional reform

In addition to the achievements, the Vietnamese economy is facing many difficulties and challenges: industrial production is recovering slowly, and the number of businesses leaving the market remains high. The macro economy is basically stable, but there are still potential risks, reflected in the handling of weak banks, the restructuring of "zero-dong" banks is still facing many difficulties; the real estate market and corporate bonds still have many issues that need to be resolved,...

According to Minister of Planning and Investment Nguyen Chi Dung, the country is facing many new opportunities, but to take advantage of the opportunities, it requires strong innovation and institutional reform. Specifically, it is necessary to build new, comprehensive mechanisms and policies in many areas of state management in attracting investment, financial resources, science and technology... from outside and promoting the internal strength of the economy. These are major issues in the short, medium and long term, in which 2024 needs to be identified as a key year, ministries, branches and localities need to focus on research and consulting on building mechanisms and policies to attract resources right from the beginning of the year.

According to Minister of Planning and Investment Nguyen Chi Dung, the country is facing many new opportunities, but to take advantage of the opportunities requires strong innovation and institutional reform.

According to Director of the Central Institute for Economic Management (CIEM) Tran Thi Hong Minh, institutions are the resources, even the important “key” to promote economic growth in the new development context. Not only relying on fiscal and monetary solutions to promote economic growth, Vietnam has created many new driving forces from economic institutional reform. That is promoting innovation, developing new economic models, reforming the business environment, restructuring the economy, perfecting regional planning and institutions.

The Government has also frankly and receptively acknowledged the issues that need to be resolved, including the backlog of documents, discipline and order in public service activities, difficulties in capital absorption, etc., in order to have directions and research to resolve them. "The work of reforming economic institutions has had important changes, especially in perfecting the policy framework for the digital economy, initially realizing a number of specific mechanisms and policies to develop the local economy, etc. Thanks to that, Vietnam has relatively effectively handled the impact of developments in the world market on economic growth, macroeconomic stability and major balances; at the same time, continuing to maintain and strengthen the confidence of the domestic and foreign investor community," the Director of CIEM said about the successful lesson of 2023.

To achieve high growth in 2024, Dr. Tran Thi Hong Minh recommended that the Government needs to be more drastic in economic institutional reform to accelerate growth recovery with requirements to soon concretize policy solutions for innovation associated with improving labor productivity and simplifying business procedures.

According to Nhan Dan Newspaper

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