Overcoming challenges, accelerating economic growth at the end of the year

Minister of Planning and Investment Nguyen Chi Dung commented: The country's GDP growth in the third quarter could decrease by 0.35 percentage points; in the fourth quarter, by 0.22 percentage points compared to the scenario without storm No. 3. It is estimated that GDP growth for the whole year could decrease by 0.15 percentage points compared to the growth scenario of 6.8-7%. In particular, storm No. 3 has seriously affected the production and business activities of many localities, which are the growth drivers of the country. Accordingly, the GRDP growth rate in 2024 of Hai Phong, Quang Ninh, Thai Nguyen, Lao Cai... could decrease by more than 0.5 percentage points.

According to calculations by the General Statistics Office, compared to the first estimated GRDP growth scenario for localities in July 2024, the annual growth decline of Hanoi is 0.2 percentage points; Hai Phong is 0.63 percentage points, Quang Ninh is 0.65 percentage points, Cao Bang is 0.51 percentage points, Lao Cai is 0.63 percentage points, Tuyen Quang is 0.5 percentage points, Yen Bai is 0.53 percentage points, Thai Nguyen is 0.59 percentage points.

Quang Ninh is one of the localities most severely affected by storm No. 3. According to reports, the estimated damage in this province is up to 24,876 billion VND. Although currently, production and business activities in this province have been restored, some accommodation and tourism establishments have also reopened, but according to Mr. Cao Tuong Huy, Chairman of the People's Committee of Quang Ninh province, the province is reviewing, adjusting and organizing the implementation of the economic growth scenario in 2024 to ensure it is consistent with reality. After 5 days since the storm passed, Quang Ninh welcomed tourists again.

Not only in Quang Ninh, storm No. 3 also caused great damage to the agricultural sector in localities and the recovery time is expected to be longer than other sectors. However, with support from the Government and economic recovery policies, Vietnam can expect a strong recovery in the last months of the year.

Mr. Vu Duc Hao, Deputy Director of the Department of Agriculture and Rural Development of Thai Nguyen province, said: The agricultural sector has instructed localities in the province to focus on pumping and draining water to avoid prolonged flooding, causing damage. With rice fields in the ripening - milky - waxy stages, after draining the water in the fields, people prop up the rice by gathering 3-4 rice stalks with ropes to form a tripod shape for the plants to stand up to create favorable conditions for the rice to be firm and ripe.

Regarding banking activities, to support customers to overcome difficulties and restore production and business, following the direction of the State Bank of Vietnam in Official Dispatch No. 7417/NHNN-TD dated September 9, 2024, the State Bank of Quang Ninh Branch issued Official Dispatch No. 785/QUN1 dated September 10, 2024 requesting credit institutions and credit institution branches in the area to restructure the term and maintain the debt group for customers borrowing capital affected by storm No. 3.

In addition, credit institution branches shall consider reducing or exempting loan interest for customers who have suffered losses; continue to provide new loans to customers to restore production and business after the storm according to current regulations; and handle debt and risk settlement according to current regulations for customers who have suffered heavy losses and are unable to pay.

Along with sharing the losses, businesses in Hai Phong city have stabilized production and business as well as proposed support from the Hai Phong Economic Zone Management Board. Mr. Jung Hyeok, General Director of LS Metal Vina Company, representing a group of businesses in Deep C Industrial Park, proposed that a part of the workers' salaries due to production stoppage should be paid by social insurance and this will help companies retain workers, reduce financial burdens...

To urgently overcome the consequences of storm No. 3, the Government also issued Resolution No. 143/NQ-CP on key tasks and solutions to urgently overcome the consequences of storm No. 3 (Yagi), quickly stabilize the people's situation, promote the recovery of production and business, actively promote economic growth, and control inflation well.

Accordingly, the Resolution clearly states the scope and subjects of support are people, workers, disadvantaged people, business households, cooperatives, and enterprises in areas affected by storm No. 3, floods, landslides. The support period is mainly in September and October 2024. Some policies to support business households and enterprises can be extended, with additional resources to be implemented until the end of 2025 to suit the recovery of businesses, business households, and seasonal factors in production and business.

With the timely actions of the Government as well as the rapid implementation of measures to restore production by people and businesses, the recently released Global Economic Outlook Report for Q4/2024 by UOB Bank also gave optimistic forecasts about Vietnam's economic growth, however, there are still doubts about the sustainability of this growth in the global context.

Many economists are concerned that Vietnam’s economy is still heavily dependent on the export sector. As the global economy slows down, Vietnam’s ability to maintain high growth will be challenged. Maintaining stable growth also requires Vietnam to continue to reform its economic structure, especially to increase labor productivity and improve the business environment. The government continues to promote policies to support businesses, especially in the context of increasing global competition.

UOB’s forecast for Vietnam’s GDP growth in 2024-2025 is a positive signal for the economy. With flexible management policies, stable inflation and strong ability to attract FDI, Vietnam is expected to continue to maintain its growth momentum, overcome global challenges and affirm its position on the world economic map.