Impressive about Vietnam's economic growth in the first 6 months of 2024, a report by HSBC's Global Research Department wrote: "For a long time, the Vietnamese economy has not had a strong boost and that expected moment has finally come."
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| Vietnam ended the second quarter of 2024 with a big surprise when economic growth far exceeded market expectations of 6%. (Photo: Viet An) |
HSBC's report titled "Reclaiming the Glory" clearly stated that in the second quarter of 2024, Vietnam's Gross Domestic Product (GDP) growth jumped to 6.9% compared to the same period last year, almost the highest level in the past two years.
Vietnam ended the second quarter of 2024 with a big surprise when GDP growth far exceeded market expectations of 6%. Combined with a slight upward adjustment to growth in the first quarter of 2024, this result brought the growth of the first 6 months of the year to 6.4% compared to the same period.
Entering July, the socio-economic situation still maintained a positive trend when some important areas such as export, import, foreign direct investment (FDI) attraction, and industrial production all grew well.
FDI: Not just a bright spot of the economy
Specifically, data from the General Statistics Office (Ministry of Planning and Investment) shows that in 7 months, the total import-export turnover of goods reached nearly 440 billion USD, up 17% over the same period last year. Of which, export turnover is estimated at 226.98 billion USD, up 15.7% over the same period last year. The trade balance of goods in the first 7 months of 2024 is estimated to have a trade surplus of 14.08 billion USD (in the same period last year, the trade surplus was 16.5 billion USD).
Industrial production maintained positive growth momentum when the industrial production index of the whole industry was estimated to increase by 8.5% in 7 months compared to the same period last year (the same period in 2023 decreased by 0.8%).
At the same time, the implementation of state budget investment capital, attracting and disbursing FDI capital continued to be bright spots of the economy. Investment capital implemented from the state budget in the first 7 months was estimated at 40.6% of the yearly plan and increased by 2.3% over the same period last year.
In the first 7 months, the country had 1,816 newly licensed projects with registered capital of 10.76 billion USD, up 11.6% over the same period last year in terms of number of projects and 35.6% in terms of registered capital. Realized FDI capital was estimated at 12.55 billion USD, up 8.4% over the same period last year. This is the highest realized FDI capital in 7 months in the past 5 years.
Mr. Nguyen Ba Hung, chief economist of the Asian Development Bank (ADB), said that attracting FDI is not only a bright spot within the economy, but also a bright spot in the picture of global investment attraction.
At the same time, the number of newly established and resuming businesses was nearly 139,500, while 125,500 businesses withdrew from the market. Thus, on average, more than 19,900 newly established and resuming businesses per month, while the number of businesses withdrawing from the market per month was more than 17,900.
In addition, thanks to favorable visa policies, the 2024 tourism promotion program promoted by localities across the country has attracted a fairly high number of international visitors to Vietnam compared to the same period last year.
In the first 7 months of 2024, international visitors to Vietnam reached nearly 10 million, an increase of 51.0% over the same period last year and an increase of 1.9% over the same period in 2019 - a year before the Covid-19 pandemic.
Vietnam is still on the right track
Commenting on Vietnam's economic growth results this year, most foreign investors have confidence in positive long-term prospects.
| Vietnam remains on track to see brighter growth prospects in 2024, if the recovery continues to spread. |
For example, United Overseas Bank - UOB 1 (Singapore) forecasts that Vietnam's growth in 2024 will reach 6%. This is reflected in the registered foreign direct investment capital in the first half of 2024 reaching 15.2 billion USD - an increase of 13.1% over the same period last year.
Meanwhile, Standard Chartered Group sees Vietnam’s economy performing better in 2024, with a full-year GDP growth rate of 6%. The group believes that compared to most other economies, a growth rate of 6% is quite impressive, nearly double the global rate and higher than emerging markets.
“This makes Vietnam one of the top growing economies globally,” Standard Chartered affirmed.
“Vietnam remains on track to see a brighter growth outlook in 2024 if the recovery continues to spread,” said Yun Liu, an economist for ASEAN at HSBC. “Given the better-than-expected growth in the first half of the year, we have raised our GDP growth forecast for this year to 6.5% (previously 6%).”
According to her, the S-shaped country will likely become the fastest growing economy in ASEAN in 2024 - a position Vietnam temporarily ceded to Malaysia and the Philippines in 2022 and 2023.
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| With more new policies, solutions and tourism products, Vietnam will continue to be a friendly destination for international tourists, helping to improve revenue for tourism industries and services. (Photo: Kim Lien) |
Important drivers
The above positive signals show that the economy has recovered positively and is gradually regaining growth momentum. However, a series of difficulties are still "knocking on the door" of the economy.
In recent comments on Vietnam's economy, Minister of Planning and Investment Nguyen Chi Dung emphasized the issue of stabilizing the macro economy and controlling inflation.
“Macroeconomic stability still faces many risks. Inflationary pressure remains high, while inflation often increases at the end of the year and there are factors that are difficult to predict, especially fluctuations in world prices, psychology, and expectations of people and businesses...”, Minister Nguyen Chi Dung informed.
In addition, low purchasing power is also an issue that needs attention. In the 7 months, according to the report of the General Statistics Office, although total retail sales of goods and consumer service revenue still increased by 8.7% compared to the previous year, if excluding the price factor, it only increased by 5.2% - significantly lower than the 9.8% increase in the same period last year.
| Inflationary pressure is still high, while inflation often increases at the end of the year and there are factors that are difficult to predict, especially fluctuations in world prices, psychology, and expectations of people and businesses... |
However, assessing Vietnam's economic growth in the last months of 2024 in a recent conversation with TG&VN reporters, Dr. Tran Thi Hong Minh, Director of the Central Institute for Economic Management (CIEM - under the Ministry of Planning and Investment) said that there are still important driving forces.
According to Dr. Tran Thi Hong Minh, exports of goods and services can maintain growth momentum, as some key markets reduce operating interest rates and help boost consumer spending, including spending on imports.
At the same time, if there are more new policies, solutions and tourism products, Vietnam will continue to be a friendly destination for international tourists, helping to improve revenue for tourism industries and services.
In addition, public investment can be disbursed more strongly if difficulties for public investment are resolutely removed, experiences and good practices are shared, and positive spillover effects from inter-regional projects or connections between localities in the region are created.
“In addition, domestic consumption can become a more important driving force if there are policy solutions to promote people's consumption, including strengthening consumer protection in the e-commerce environment and in non-cash payment activities,” said Ms. Minh.
CIEM Deputy Director Dr. Dang Duc Anh also highly appreciated the important contributions of the "three economic pillars": Investment, export, and consumption in the first 6 months of 2024.
Dr. Dang Duc Anh said that in the first half of the year, exports increased by 14.5% compared to the same period in 2023 (domestic sector with some agricultural and aquatic products exported increased by 19%). Many traditional export markets such as the US, European Union (EU), China, etc. have recovered, thanks to which many industrial export products have grown, leading to domestic industrial production regaining momentum.
In order for the “three economic pillars” to continue to recover and contribute to promoting growth, Dr. Dang Duc Anh realized that it is necessary to clarify weaknesses in order to compensate appropriately.
The Deputy Director of CIEM pointed out: “With regard to exports, we need to note that the proportion is leaning towards the FDI sector with nearly 72% of the total turnover in the first 6 months of the year. Therefore, how to increase the export value added of the domestic economic sector is the issue. Along with that, we need to soon study to increase the family deduction level to contribute to promoting domestic consumption.
Currently, the public investment sector only accounts for about 25 - 26% of total social investment capital; the largest is the private investment sector at 58%. Therefore, we need to have solutions to promote private investment."
We believe that, thanks to the smooth start in the first month of the third quarter of 2024 and the efforts of the Government, people and business community, the economy in the last months of the year will maintain a positive recovery momentum and soon "regain its glory" - as the title of the report recently published by HSBC Bank.
Source: https://baoquocte.vn/kinh-te-viet-nam-thoi-khac-mong-doi-da-toi-giu-vung-3-chan-kieng-kinh-te-lay-lai-hao-quang-281391.html
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