Government leaders have expressed the spirit of "turning the situation around" in their leadership and management, helping the economy overcome headwinds and become one of the fastest growing economies in the region and the world.
On January 5, the Government held a national online conference to review the work in 2023 and deploy tasks for 2024.
Prime Minister Pham Minh Chinh said that in the context of unpredictable developments in the world and the region in 2023, Vietnam will suffer a "double impact" due to unfavorable external factors and internal limitations and shortcomings. However, thanks to the spirit of "turning the situation around and changing the state" in the Government's management, the economy has "overcome the headwind".
Last year, economic growth was recorded higher in each quarter than the previous quarter. GDP in 2023 increased by 5.05%. With this data, Deputy Prime Minister Le Minh Khai said that Vietnam is in the high growth group in the region and the world, raising the size of the economy to 430 billion USD, the average consumer price index increased by 3.25% (lower than the target of 4.5%).
Interest rates decreased by about 2% compared to the end of 2022. Agriculture was a bright spot, a solid pillar when it increased by 3.83% last year, the highest in 10 years. Budget revenue exceeded the estimate by about 8.12%, reaching over 1.75 million billion, while tax exemptions, reductions, and extensions of land rents totaled 194,000 billion. Total import-export turnover reached 683 billion USD, with a trade surplus of 28 billion USD, the highest ever, contributing to increasing national reserves.
Disbursement of public investment capital is expected to reach nearly VND676,000 billion, equivalent to 95% of the plan assigned by the Prime Minister. This figure is about VND146,000 billion higher than in 2022, and is the highest disbursement level ever.
Vietnam remains an attractive destination for foreign investors, with foreign capital attraction increasing by more than 32%, reaching nearly 37 billion USD.
Prime Minister Pham Minh Chinh speaks at the Government conference with localities on January 5. Photo: VGP
However, the economy still shows some limitations and shortcomings, such as economic growth being among the highest in the region and the world but not reaching the set target (6.5%).
The reasons cited by the Government leaders are the decline in aggregate demand, disruptions in supply chains, production, and tight monetary policies in countries that are Vietnam's large, traditional markets. Electricity production and supply basically meet demand, but there is still a local shortage of electricity in May-June 2023, mainly due to the passive and confused dispatch, transmission, and distribution.
Production and business face many difficulties, the situation of enterprises lacking orders is common due to the decline in domestic and foreign consumption demand.
Access to credit is still difficult. By the end of 2023, credit will increase by 13.71% compared to 2022 (the target is to increase by 14-15%), equivalent to 13.5 million billion VND. The balance of capital mobilized from the population will reach over 14.5 million billion, an increase of 13.16%. However, bad debt tends to increase, when the on-balance sheet debt ratio is 3.36%, higher than the control target (by the end of 2025, below 3%).
According to the Government leader, handling weak credit institutions and remaining backlog projects is difficult due to the need to carry out many processes and procedures, including accurately assessing and appraising the value of assets that have been around for many years.
The real estate market has improved, but is still sluggish mainly due to segmentation problems and legal issues. The corporate bond market is being unblocked but still has potential risks.
Prime Minister Pham Minh Chinh raised the issue that although some indicators are positive, ministries, sectors and localities have not yet taken advantage of this opportunity for socio-economic development. For example, the budget deficit is well controlled, public debt and foreign debt are at the warning threshold, but what needs to be done to take advantage of fiscal policy space for socio-economic development?
Therefore, he requested an analysis of results in public investment, FDI attraction and disbursement, budget collection, industrial production, agriculture... to overcome weaknesses for management in 2024.
Reporting on socio-economic development, Deputy Prime Minister Le Minh Khai said that this year, opportunities, advantages and challenges are forecast to intertwine but there are more difficulties. In addition to a stable macro-economic foundation, Vietnam's economy still faces many difficulties.
Deputy Prime Minister Le Minh Khai speaks at the Government conference with localities on January 5. Photo: VGP
2024 is considered a breakthrough year in the 5-year economic development plan. Prime Minister Pham Minh Chinh, concluding the conference, said that the Government will prioritize promoting economic growth (6-6.5%), maintaining macroeconomic stability, and controlling inflation at 4-4.5%. Exports are expected to increase by at least 6% compared to 2023, or nearly 724 billion USD.
Experts also predict that inflation pressure this year will not be high, as the scenarios given revolve around 3.2-3.9% - lower than the National Assembly's target (4.5%).
In addition to traditional growth drivers (investment, export, consumption), the Government will promote new drivers of science and technology, innovation, digital transformation, green transformation, and emerging fields such as semiconductor chips and hydrogen. At the same time, it will accelerate the disbursement of public investment capital and the construction progress of key transport projects, especially Long Thanh airport.
The Prime Minister requested ministries, sectors and localities to remove difficulties, promote production and business to increase the economy's ability to absorb capital. "We have to resolve the backlog and congestion that has lasted for many years in terms of policies and implementation; at the same time, we have to deal with and react quickly to new developments that may arise that have not been fully predicted," he said.
He also requested to continue cutting administrative procedures with the goal of reducing compliance costs by 10%. The budget must increase revenue and save spending. "We are determined to save 5% of spending and increase the state budget revenue by at least 5% in 2024," the Prime Minister concluded.
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