Vietnam's economy continues to recover, with GDP growth estimated at 5.66% in the first quarter of 2024. Although there are still difficulties ahead, if we know how to seize opportunities and make efforts, the economy can continue to accelerate.
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| Import and export were a bright spot in the first quarter of 2024, with total turnover increasing by 15.5% over the same period last year. Photo : DM |
Going according to plan, GDP growth in the first quarter of 2024 will reach 5.66%
As forecasted by many international organizations, Vietnam's GDP growth in the first quarter of 2024 is estimated to reach 5.66%, according to official figures released by the General Statistics Office last weekend.
“This is a positive growth rate in the context of the current global and regional economic instability. The economy is following the growth scenario set out in Resolution No. 01 of the Government,” Deputy Minister of Planning and Investment Tran Quoc Phuong told reporters of Dau Tu Newspaper.
According to the 2024 growth scenario set out in Resolution No. 01/NQ-CP on key tasks and solutions to implement the Socio-Economic Development Plan and State Budget Estimates for 2024, for the economy to achieve the growth target of 6-6.5%, the first quarter must grow by 5.2-5.6%; the second quarter by 5.8-6.2%; the first 6 months by 5.5-6%; the third quarter by 6.2-6.7%; the first 9 months by 5.7-6.2%; and the fourth quarter by 6.5-7%. Thus, the growth figure of 5.66% is even higher than the high threshold of the growth scenario developed by the Government.
“Positive” is also the phrase that Ms. Nguyen Thi Huong, Director General of the General Statistics Office, mentioned when talking about the economic situation in the first quarter of 2024. According to Ms. Huong, this result has shown that the efforts in management of the Government and the Prime Minister are gradually showing effectiveness.
According to the General Statistics Office, the growth rate of 5.66% in the first quarter of 2024 is the highest in the first quarters of the past 5 years (from 2020 onwards, GDP growth in the first quarters increased by 3.21%; 4.85%; 5.12%; 3.41% and 5.66%, respectively). In this general growth rate, the agriculture, forestry and fishery sector increased by 2.98%, contributing 6.09%; the industry and construction sector increased by 6.28%, contributing 41.68%; the service sector increased by 6.12%, contributing 52.23%.
Thus, while the agricultural and forestry sector continues to play a key role, the industrial and service sectors have recovered significantly. “The driving force of economic growth in the first quarter is the recovery of industrial production and the service sector,” said Deputy Minister Tran Quoc Phuong.
Statistics have also shown this. An obvious example is that the industrial production value of the processing and manufacturing industry increased by 6.98%, contributing 1.73 percentage points to the overall growth of the economy. The recovery of this industry has played an important role in leading the economy to maintain its growth momentum.
Meanwhile, the service sector has also recovered positively, especially tourism services. In the first quarter of the year, the number of international visitors to Vietnam reached 4.6 million, up 72% over the same period last year and up 3.2% over the same period in 2019 - a year before the Covid-19 pandemic. The number of Vietnamese people leaving the country reached 1.2 million, up 11.5% over the same period last year.
Similarly, import and export is also a positive bright spot, when the total import and export turnover in the first 3 months of the year reached 178.04 billion USD, up 15.5% over the same period last year. Of which, exports alone reached 93.06 billion USD, up 17% over the same period last year. The strong recovery of trade in goods is a factor highly appreciated by experts from the World Bank (WB) and the Asian Development Bank (ADB). According to Mr. Shantanu Chakraborty, ADB Country Director in Vietnam, public investment, domestic consumption and export recovery are the three main growth drivers of Vietnam's economy in 2024.
Keep facing difficulties
Although the economy has achieved positive results and the recovery momentum has been maintained, it is clear that the difficulties and challenges ahead are still very great.
Speaking to reporters from Dau Tu Newspaper, Deputy Minister Tran Quoc Phuong also emphasized this. According to the Deputy Minister, the fact that more than 74,000 businesses left the market in the first quarter of 2024, an increase of nearly 23% compared to the same period last year, or that credit growth is currently only at 0.26%... are indicators that the economy is still facing many challenges.
“This is something we have mentioned a lot recently. The business sector is still facing difficulties, so capital absorption is still low. Although production and business have recovered, it is still slow,” said Deputy Minister Tran Quoc Phuong.
In fact, although industrial production is still growing at a positive rate, according to data from the General Statistics Office, there are still 9 localities with a decrease in the Industrial Production Index compared to the same period. The main reason is that these localities have a low increase or decrease in the Industrial Production Index compared to the same period.
For example, Quang Nam increased by only 0.5%; Quang Ngai increased by 0.2%; while Bac Ninh still decreased by 8.8%. Last year, these were also the localities with low Manufacturing and Processing Industrial Production Index. In particular, Bac Ninh decreased sharply, causing the "capital" of the electronics industry in the North to have negative growth last year. In the first quarter of this year, the situation in Bac Ninh has not improved much.
According to information, in the first quarter of 2024, there were still 6 localities with negative GRDP growth. Da Nang, one of the country's major economic centers, also had negative growth (-0.83%). In this locality, in the first quarter, the service sector - which is the main contributor to the city's overall growth - only increased slightly by 0.14%, while the industrial and construction sectors continued to have negative growth of 3.55%.
Commenting on the challenges and difficulties of the economy, Dr. Vo Tri Thanh, former Deputy Director of the Central Institute for Economic Management (CIEM), when speaking at the recent Workshop on Identifying Bright Spots for Business and Investment in 2024, on the one hand mentioned the bright spots of the economy, such as exports, attracting foreign investment, controlling inflation, but on the other hand, also expressed concern about the confidence of the market and investors. Stagnant private investment, low credit growth, and the real estate market has not clearly recovered are things that Mr. Vo Tri Thanh emphasized.
“Consumption seems to be slowing down, private investment and credit borrowing still show signs of concern,” said Mr. Vo Tri Thanh.
This is a fact. In addition to the figures on the withdrawal of the business sector from the market, or the low growth rate of outstanding credit, a notable figure is that the purchasing power of the economy is still low.
According to data from the General Statistics Office, total retail sales of goods and consumer service revenue in the first three months of this year, after deducting the price factor, increased by only 5.1%, half of the 10.1% increase in the same period last year. Weak domestic purchasing power while foreign purchasing power has not recovered will affect the production, business and export of enterprises.
Seize opportunities, overcome challenges
There are worries and concerns, but Mr. Vo Tri Thanh himself also emphasized the opportunities of the economy, that there are bright spots in difficulties, and that the difficulties have been "less difficult", to say: "Don't be too pessimistic, seize the opportunity to overcome challenges".
The growth rate of 5.66% in the first quarter of 2024 is the highest in the first quarters of the past 5 years. Of which:
The agriculture, forestry and fishery sector increased by 2.98%, contributing 6.09%;
The industrial and construction sector increased by 6.28%, contributing 41.68%;
The service sector increased by 6.12%, contributing 52.23%.
Indeed, many localities across the country have known how to seize opportunities to overcome challenges. Bac Giang is a typical locality.
At a recent meeting organized by the Bac Giang Provincial Party Committee, Bac Giang Provincial Party Committee Secretary Duong Van Thai said that Bac Giang's GRDP growth in the first quarter of 2024 reached 14.18%, ranking first in the country. Budget revenue also achieved positive results.
“It is necessary to continue to handle the issue of site clearance, promote disbursement of public investment capital and attract investment to continue maintaining economic growth momentum,” Mr. Duong Van Thai directed.
Bac Giang can be considered a "rising star" not only in attracting investment, but also in general economic development in the Northern region recently. Thanks to efforts to improve the investment environment and complete planning early, in recent years, Bac Giang has attracted a series of big names, such as Foxconn, Luxshare ICT, Hana Micron... These investment projects have significantly contributed to boosting Bac Giang's Industrial Production Index and GRDP growth. In the first quarter of 2024, Bac Giang's Industrial Production Index increased by 23.8%, more than double the increase of 10.5% in the same period last year.
Also striving to overcome challenges, Ho Chi Minh City achieved a GRDP growth rate of 6.54%, exceeding the forecast (5.5% - PV). In the first quarter of last year, the country's economic locomotive only grew by 0.7%. Meanwhile, Hanoi had a growth rate of 5.5%, lower than the growth rate of 5.81% in the first quarter of last year. These growth rates will create momentum for the remaining quarters of the locality, as well as the economy in general.
“Achieving a full-year growth rate of 6-6.5% is a big challenge, requiring the efforts, joint efforts and consensus of the entire political system,” said the head of the General Statistics Office, proposing a series of solutions, such as persistently maintaining macroeconomic stability, continuously updating scenarios on growth and inflation, to harmoniously manage fiscal and monetary policies to promote economic growth. Along with that, boosting exports, focusing on developing the domestic market, promoting disbursement of public investment capital, etc.
These are the solutions that have been directed by the Government a lot recently. Not only strongly promoting and renewing traditional growth drivers, but also effectively exploiting new growth drivers.
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