Dr. Tran Thang Long, Director of Analysis of BIDV Securities Joint Stock Company (BSC), said that by November 2024, the progress of disbursement of public investment capital had reached over VND 400,000 billion, equivalent to 54% of the plan and over 60% of the target set by the government.
“We still have time. The public investment plan is usually calculated until January 2025, so ministries and branches from the central to local levels will have another month to promote,” Dr. Long commented. This shows that, despite many challenges, the disbursement target is still achievable if ministries and branches are determined in the last weeks of the year.
The importance of public investment in the Vietnamese economy is even more evident in the current context. Dr. Long said that when public investment increases by 1%, GDP will also be affected accordingly in the year. However, more importantly, this is the foundation for other sectors to grow in the coming years. Public investment not only contributes directly to GDP, but also creates infrastructure development, indirectly contributing to other economic sectors such as personal consumption and import and export.
Two economic sectors that will recover strongly in 2024, mentioned by Dr. Long, are personal consumption (up 8.5%) and import and export (up 14-15%). “Thanks to that momentum, we are almost certain to achieve the GDP growth targets set this year,” Dr. Long assessed. This reduces the pressure on managers to promote public investment.
Entering 2025, the international economic context may face great challenges for Vietnam. Dr. Long mentioned unknowns such as the US presidential election and new trade policies. “External factors cannot be controlled, but we can flexibly respond and make good use of domestic tools. From 2025, public investment will be even more important,” Dr. Long emphasized.
The stock market is expected to benefit from the overall growth trend. “Corporate profits are expected to increase by 18-19%. However, factors such as the Fed’s interest rate or international trade policy will still have an impact,” Dr. Long said. Meanwhile, the domestic investment environment and high GDP growth forecast (reaching over 8%) will help the stock market maintain its growth momentum.
In addition to the construction and building materials industry, Dr. Long believes that infrastructure, industrial park real estate, logistics, banking and securities groups will also benefit when public investment is promoted. “Public investment policies also have widespread spillover effects, from logistics to banking and securities. These industry groups will also contribute significantly to the overall growth momentum,” Dr. Long emphasized.
Furthermore, public investment also acts as a psychological lever for the private sector. The increase in infrastructure projects not only helps businesses grow, but also increases investor confidence. In particular, large projects such as airports, highways and industrial park infrastructure are creating attractive opportunities to attract FDI capital to Vietnam.
Although public investment brings many benefits, its implementation still faces many challenges. One of the main problems is slow disbursement, due to complicated administrative procedures, lack of coordination among stakeholders and limited implementation capacity in some localities. To solve this problem, Dr. Long proposed: “More drastic measures should be applied to shorten the time for approving and implementing projects. At the same time, supervision should be strengthened to ensure progress and quality.”
Another solution is to strengthen public-private partnerships (PPPs) to optimize resources and reduce pressure on the state budget. “The PPP model not only helps mobilize capital, but also motivates the private sector to participate in key projects,” Dr. Long said.
In the long term, public investment is expected to create modern infrastructure that will enhance Vietnam’s competitiveness in the international arena. Major projects such as the North-South high-speed railway, Long Thanh airport and new industrial parks will not only improve transport and logistics, but also boost exports and connect key economic regions.
Dr. Long also emphasized that public investment not only aims at economic growth, but also contributes to solving social problems. The development of health infrastructure, education and urbanization will improve people's quality of life, thereby creating momentum for sustainable economic growth.
In the context of a volatile global economy, public investment is emerging as an important tool to help Vietnam maintain growth momentum and economic stability. Although there are many challenges, with determination and appropriate policies, Vietnam can fully exploit the potential of public investment to promote sustainable development and enhance the country's position in the international arena. "Public investment is the key to opening up a prosperous future for Vietnam," Dr. Long affirmed.
Source: https://thoibaonganhang.vn/thuc-day-dau-tu-cong-chia-khoa-cho-tang-truong-kinh-te-viet-nam-159291.html
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