TPO - Currently, consumption and investment alone contribute over 90% to GDP growth. In the context of export difficulties, there needs to be solutions to stimulate and unblock these two drivers. "However, the current problem lies in the fact that money supply is increasing but money turnover is slow. This causes money to flow into the market at a speed not fast enough to promote growth," said economist Can Van Luc.
TPO - Currently, consumption and investment alone contribute over 90% to GDP growth. In the context of export difficulties, there needs to be solutions to stimulate and unblock these two drivers. "However, the current problem lies in the fact that money supply is increasing but money turnover is slow. This causes money to flow into the market at a speed not fast enough to promote growth," said economist Can Van Luc.
Money into the economy is still slow.
At the workshop "Investment opportunities in the new context" held this morning (March 19) in Hanoi, economic expert Can Van Luc said that this year Vietnam wants to grow rapidly to 8% but the world context is fraught with many difficulties and challenges. The global economy is slowing down and is forecast to grow at about 2.7%, lower than the 2011-2019 period.
Currently, the US and China, Vietnam's two largest trading partners, both have lower growth than forecast. Meanwhile, domestically, private investment and consumption remain low compared to before the COVID-19 pandemic.
According to Mr. Luc, in the first two months of this year, consumption only increased by 6%, only 2/3 compared to before the COVID-19 pandemic. At the same time, businesses are facing many difficulties due to the impact of the trade war, high input and logistics costs, and uneven recovery of orders...
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Dr. Can Van Luc shared at the workshop. Photo: Pham Thang. |
Assessing Vietnam's growth drivers, Mr. Can Van Luc said that in January, exports grew negatively due to the impact of the Tet holiday and the trade war. In February, they started to increase again but slowly, so the 12% growth target set by the Ministry of Industry and Trade is very challenging.
With public investment this year, the disbursed capital is expected to be around VND900,000 billion, an increase of 25% compared to last year. According to Mr. Luc, if this capital source is disbursed, especially many key projects that are being promoted to finish this year, it will be a driving force spreading to the economy.
“Many people say that Vietnam’s growth momentum is largely influenced by exports. But currently, consumption and investment alone contribute over 90% to growth. Therefore, the key issue now is to find solutions to stimulate and unblock these two driving forces. However, the problem now is that money supply is increasing but money turnover is slow. This causes money to flow into the market at a speed not fast enough to promote growth,” commented Dr. Can Van Luc.
Mr. Luc said that to achieve the growth target of 8% this year, public investment needs to be disbursed faster, and bottlenecks in the real estate market need to be resolved faster. The government, ministries and sectors need to study solutions to stimulate consumer demand; they need to study from China how they stimulate demand, while speeding up administrative procedure reform, especially promoting the private economy to create momentum in the whole society.
Bad debt handling in the direction of debt cancellation or only principal collection
According to Dr. Le Xuan Nghia - member of the Government's Monetary Policy Advisory Council, this year the bank plans to pump about 2.5 million billion VND into the market; this is a large amount of money and currently bank interest rates have dropped to a low level. However, it is also necessary to recognize that businesses are still facing difficulties in accessing capital, mainly due to lack of output and problems with collateral, especially when the real estate market has no clear exit - which is a place that attracts large investments from domestic businesses.
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Overview of the seminar on investment opportunities in the new context. Photo by Pham Thang. |
Mr. Nghia said that in order to promote investment by Vietnamese private enterprises, in addition to expanding the search for export markets in terms of both quality and quantity, it is necessary to expand domestic consumption, especially housing, furniture, tourism services, etc. Banks need to promote the handling of bad debts in the direction of debt cancellation or partial recovery of principal or principal debt.
“Recovering bad debt and recovering both principal and interest is rare, contrary to international practice, especially in the age of technology, it is impossible to sit and wait to collect all principal and interest of debts for decades. This affects both the operation of the banking system and the existence of businesses,” said Mr. Nghia.
According to Mr. Nghia, to achieve the expected growth target of over 8% in 2025, the easing of credit will depend on the recovery of domestic private sector investment. This will be the decisive factor in the credit growth rate and also the decisive factor in the economic growth rate.
Source: https://tienphong.vn/tien-do-ra-thi-truong-khong-du-toc-do-de-thuc-day-tang-truong-post1726210.tpo
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