This morning (October 15), in Hanoi, the Vietnam Institute for Economic and Policy Research (VEPR - under the University of Economics, Vietnam National University, Hanoi) in collaboration with Vietnam National Assembly Television organized the seminar "Policy Dialogue: Growth Recovery - Prospects and Challenges".
At the Seminar, presenting VEPR's report on "Economy in the third quarter of 2024: Growth recovery - Prospects and challenges", Dr. Nguyen Quoc Viet, Deputy Director of VERP, said that at the end of the third quarter of 2024, Vietnam's economy had recovered relatively well amid optimism about the overall growth of the world economy in late 2024 and 2025.
Gross Domestic Product (GDP) growth after 9 months reached 6.82%, 1.5 times higher than the 4.4% in the same period last year, with the main contribution coming from the industrial and service sectors.
On the aggregate demand side, the report pointed out that recovering trade and positive foreign direct investment (FDI) inflows were the main growth drivers.
Import and export of goods increased faster than expected, with total import and export turnover reaching 578.5 billion USD, up 16.3% over the same period, with a trade surplus of 20.8 billion USD - a fairly positive trade surplus in the period 2020 - 2024.
However, consumer spending remains below pre-pandemic levels and inflationary pressures in the first half of 2024 have also dampened capital growth.
According to Dr. Viet, state budget revenue exceeded the plan while public spending decreased compared to the same period in 2023, leading to a continued high budget surplus, creating room for continued fiscal policies in 2024 such as tax exemption, extension, and reduction policies, especially in the context of industries and sectors suffering damage from storm No. 3 Yagi.
"Trade has grown positively, FDI capital has reached a record high, tourism has recovered strongly, and the USD exchange rate at domestic commercial banks has continuously decreased, with the price much lower than the ceiling set by the State Bank of Vietnam (SBV).
Money supply growth and credit growth have recovered quite well, contributing positively to promoting growth and investment, although still lower than the average before the Covid-19 pandemic.
The State Bank of Vietnam has continued to implement relatively successful flexible monetary policies in the recent period to reduce shocks and intervene in liquidity, helping to lower interest rates and support capital costs for the economy without having to intervene in operating interest rates," the Deputy Director of VEPR emphasized.
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| Dr. Nguyen Quoc Viet, Deputy Director of VERP, presented the report "Economy in the third quarter of 2024: Growth recovery - Prospects and challenges". |
Risks and challenges lie ahead
Dr. Nguyen Quoc Viet assessed that although the economy has many positive bright spots, there are still risks and challenges ahead. For example, the rate of businesses withdrawing compared to businesses entering the market is still high. Domestic consumption and public investment disbursement have not met expectations.
Looking further, the trend of global economic and political fragmentation and extreme weather events due to climate change may cause external demand to decline. Cost-push makes export competitiveness and the ability to participate more deeply in the global value chain face many challenges.
Meanwhile, input factors in production face many barriers as well as difficulties in transforming the growth model, innovating the business environment and reforming institutions. Although some progress has been made, it is still slow, posing many risks in investment and business, discouraging the domestic and foreign business community.
The Deputy Director of VEPR commented that for the rest of the year, Vietnam's economy is facing many challenges.
Specifically, weaker-than-expected US consumption and production demand, a sharp slowdown in growth in Europe and slowing growth in China could disrupt the export recovery process and weaken Vietnam's growth rate.
Export prospects also face uncertainty due to possible changes in US trade policy following the US presidential election.
At the same time, balancing growth drivers, especially between export drivers and domestic market growth, ensuring macroeconomic stability and sustainable growth is urgently required in that context.
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| Delegates attending the Plenary Session: Presentation and discussion of the Economic Report for the third quarter of 2024: Growth recovery - Prospects and challenges. |
In addition, the increasingly clear geopolitical fragmentation, along with the escalation of conflicts involving Russia, the US, China and the Middle East region, is becoming the biggest risk to the global economy.
"These uncertainties disrupt supply chains, increase transportation and insurance costs, and lengthen supply times, leading to higher commodity prices and increased imported inflation. It is estimated that by the end of 2024, global imported inflation could increase by 1.5%.
This is a worrying signal for importing countries like Vietnam, as inflation not only increases but also reduces the competitiveness of domestic enterprises," Dr. Viet affirmed.
Sharing at the Seminar, Mr. Phan Duc Hieu, Standing Member of the National Assembly's Economic Committee, also recognized that economic growth in the last months of 2024 faces many challenges.
"The damage caused by Typhoon Yagi has not yet been repaired, which has and will affect the production and business activities of enterprises and people. Therefore, policies to support people and businesses after the storm need to be implemented quickly to support economic growth," said Mr. Hieu.
With advantages, difficulties and challenges intertwined, VEPR offers two high and low scenarios.
In the high scenario, growth in the fourth quarter of 2024 will be flat at 7.4%, and growth for the whole year of 2024 is expected to reach the new target of 7% set by the Government for 2024.
In the low scenario, growth in the fourth quarter of 2024 will be below 7%, and growth for the whole year of 2024 is forecast to fluctuate around 6.84%.
At the Seminar, delegates focused on discussions in two sessions. Plenary session: Presentation and discussion of the Economic Report for the third quarter of 2024: Growth recovery - Prospects and challenges. Thematic discussion session: Reform of special consumption tax on alcoholic beverages.
Source: https://baoquocte.vn/vepr-with-the-success-of-vietnam-economic-growth-will-be-targeted-for-7-years-of-government-290146.html
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