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| Vietnam needs to continue to increase investment in infrastructure development and prioritize reducing carbon emissions. (Source: Vietnam Insider) |
Economic highlights in 2023
In 2023, Vietnam's GDP growth will reach over 5.05%, more than double the world's average GDP growth rate and among the countries with the highest growth rates in the world.
The agricultural sector continued to be a strong pillar of the economy, increasing by 3.83%, the highest in the past 10 years, with exports of over 53.01 billion USD, a trade surplus of 12.07 billion USD, an increase of 43.7%, accounting for over 42.5% of the country's trade surplus.
For the first time, the forestry sector has completed procedures to successfully transfer 10.3 million tons of carbon emissions reduction to the Forestry Carbon Partnership Fund through the World Bank, earning VND1,200 billion, contributing to forestry development.
Growth momentum is maintained thanks to the continued expansion of the domestic market and the attraction of foreign direct investment (FDI) with many breakthroughs with many large projects in the high-tech sector. Vietnam continues to be an attractive destination for investment flows shifting to the region and internationally thanks to its advantages of political stability, young population, impressive economic growth rate, and rapidly increasing number of middle-income consumers, as well as increasingly synchronous and modern infrastructure.
In 2023, total FDI capital in Vietnam will reach a record 36.6 billion USD, up 32.1% over the previous year; realized FDI capital is estimated at 23.18 billion USD, up 3.5% over 2022, the highest figure in the past five years.
Many signals show that Vietnam is and will have stronger and deeper participation in a number of new global supply chains in many fields of industrial production, agriculture and high-tech services.
Other indicators have shown steady growth, such as: total state budget revenue in 2023 is estimated at VND 1,717.8 trillion, equal to 106% of the annual estimate. The average CPI for the whole year increased by 3.25%. The unemployment rate among working-age people is 2.28%, down 0.06 percentage points compared to the previous year... The whole country attracted 12.6 million international visitors, 3.4 times higher than in 2022, far exceeding the target of 8 million international visitors for the year.
In 2023, foreign affairs activities will take place continuously and vigorously, with economic diplomacy standing out, continuing to attract resources to serve national development. This is also the year that Vietnam and Israel signed a Free Trade Agreement (FTA) and are initiating negotiations on a Comprehensive Economic Partnership Agreement (CEPA) with the United Arab Emirates.
Vietnam and 13 partners in the Indo-Pacific Economic Framework for Prosperity (IPEF) announced the conclusion of negotiations on the International IPEF Supply Chain Agreement. Furthermore, with the upgrade of Vietnam-US relations to Comprehensive Strategic Partnership, Vietnam has established Comprehensive Strategic Partnership and Strategic Partnership with all permanent members of the United Nations Security Council.
At the end of 2023, Vietnam was recognized by the world as a bright spot in the general economic picture and continued to receive high appreciation when on December 8, 2023, Fitch Ratings upgraded Vietnam's long-term foreign currency issuer credit rating from BB to BB+, with a stable outlook.
Outlook 2024
In its global research report on Vietnam published in January, Standard Chartered Bank Vietnam forecasts Vietnam's GDP growth to reach 6.7% in 2024, with the recovery trend continuing to improve over time (GDP growth reaching about 6.2% in the first half of the year and 6.9% in the second half of 2024).
Standard Chartered’s expectations are based on strong domestic consumption, moderate inflation, and accelerating public investment disbursement. The service sector is expected to continue expanding thanks to the revival of the tourism industry and the recovery of related services. Export headwinds will gradually ease in 2024, as the US and EU economies begin to recover…
To maintain growth and competitiveness, the bank's economist emphasized, Vietnam needs to continue to increase investment in infrastructure development and prioritize reducing carbon emissions.
Sharing the same opinion, Dr. Can Van Luc, chief economist of BIDV, said that following the recovery momentum in the second half of 2023, the increased efficiency of traditional growth drivers combined with the ability to promote new growth drivers, Vietnam's GDP growth in 2024 could reach 6-6.5%.
At the same time, Dr. Can Van Luc suggested that on the one hand, it is necessary to continue to closely follow the international economic and financial situation; proactively analyze and forecast developments in the international financial and monetary markets to have appropriate proactive response scenarios. On the other hand, it is necessary to focus on traditional growth drivers in the direction of diversifying export markets, making better use of signed FTAs and recently upgraded strategic partnerships. Along with that, it is necessary to promote effective and planned public investment disbursement, becoming seed capital for other capital sources and having policies and solutions to stimulate private investment and domestic consumption.
In addition, Vietnam needs to better exploit new growth drivers related to: digital economic development, application of science and technology, green growth, energy conversion, etc.
Most recently, on January 15, at the workshop "Vietnam's economy in 2023 and prospects for 2024: Reforms to accelerate growth recovery" organized by the Central Institute for Economic Management (CIEM) in collaboration with the German International Cooperation Organization (GIZ), the report prepared by CIEM Director Dr. Tran Thi Hong Minh forecasted that Vietnam's economic outlook in 2024 could be in two scenarios, growth of 6.13% or 6.48%.
To achieve these growth scenarios, Ms. Hong Minh said that in 2024, Vietnam needs to continue to focus on promoting economic growth recovery on the basis of firmly improving the microeconomic foundation and innovating the economic institutional system in a more innovation-friendly and environmentally friendly direction, associated with effectively handling risks in the volatile international economic environment.
Thus, in general, it can be seen that the most difficult period on the journey of economic recovery after the pandemic has passed. Most forecasts of economic growth index in 2024 will be more positive than in 2023. However, as the Prime Minister commented, in 2024, Vietnam will continue to suffer from "double negative impacts" from unfavorable external factors and internal limitations and shortcomings.
In order for Vietnam's economy to continue its recovery momentum in the second half of 2023 and accelerate growth in 2024 as approved by the National Assembly (about 6-6.5%), the Government needs to consider the above opinions and consistently implement Resolution 01 and Resolution 02/2024 that have just been issued.
According to Resolution 02/NQ-CP dated January 5, 2024 on solutions to improve the investment environment and enhance competitiveness, the Government sets specific goals: - In 2024, strive to increase the number of enterprises entering the market (newly established and returning to operation) by at least 10% compared to 2023. - Regarding WIPO's innovation capacity: Raise the ranking of the Information Technology Infrastructure index group by at least three levels; raise the ranking of the Environmental Quality index by at least 10 levels; raise the ranking of the ICT Services Export index by at least 5 levels; Increase the score of the Customs Clearance Procedures index in the World Bank's logistics efficiency ranking by at least 0.2 points. - Regarding the World Economic Forum's tourism and travel development capacity: raise the ranking of the Priority Level Index Group for Tourism and Travel by at least five levels; raise the ranking of the Tourism Service Infrastructure Index Group by at least three levels. |
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