Economist, Associate Professor, Dr. Dinh Trong Thinh had an interview with reporters of the Industry and Trade Newspaper about this issue.
Recently, many experts have said that in the new context of economic growth, the important factor is to promote aggregate demand. What is your comment on this?
Yes, increasing aggregate demand is an important factor in reducing inventories, promoting production, business and exports in the economy. Therefore, we need to step up the search for orders from countries around the world to boost the export of goods. Especially now, many businesses have orders until the end of June 2024, so finding orders is very important.
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| Consumers shop at Aeon Ha Dong supermarket |
Regarding public investment, in 2023, we only achieved 93.5% (not reaching the 95% target set by the Prime Minister), but this is a great effort, because in 2023, the amount of public investment capital increased by more than 23% compared to 2022.
By 2024, the amount of public investment capital will be about 657 trillion VND. Although the number is smaller than in 2023, this is still a very large amount of capital. But more importantly, implementing public investment this year will face more difficulties. The reason is that we decided to invest in building highways in the Mekong Delta. This is an area with weak soil, without land mines to serve the leveling. Therefore, this is also one of the challenges for public investment in 2024.
And so, finding solutions to get raw materials as well as necessary factors to promote site clearance, thereby promoting public investment. Only then can we achieve the desired figure of capital disbursement reaching 95% in 2024.
Regarding domestic consumption, in the first quarter of 2024, we have a growth rate of nearly 9%. This is not a high number, but compared to 2023, we have also improved. However, in reality, the domestic consumption rate has increased by nearly 20% in some years. Therefore, how to stimulate domestic consumption is also a very important issue.
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| Economist, Associate Professor, Dr. Dinh Trong Thinh |
Of course, the Government and ministries have also implemented solutions to stimulate domestic consumption. For example, reducing value added tax by 2%; reducing fees, charges, land rents, etc., but the impact of these factors is still very slow. Therefore, to boost domestic consumption, along with the government's solutions, businesses need to make efforts to reduce product costs, reduce selling prices, and implement promotional programs to achieve the highest sales volume.
However, to maximize sales, we also depend on other factors, including income. As we know, in 2023, workers' incomes will face difficulties, and many classes of people will have no or low incomes. Therefore, consumers will save and not dare to spend. Therefore, increasing workers' incomes is also an important factor to boost domestic aggregate demand.
From the results achieved in the socio-economic situation of the first quarter of 2024, what is your forecast for the economic situation in the second quarter?
I think that in the second quarter of 2024, Vietnam's economic situation will be better. The reason is that in the first quarter of 2024, we achieved the highest economic growth rate in the past 5 years.
This is a very remarkable result. In addition, along with inflation being controlled, the number of newly established enterprises increased compared to the same period last year; foreign investment attraction also increased. Therefore, the opportunity for better economic growth (GDP) in the second quarter is what we are waiting for.
Better economic growth will have a reverse effect, helping people's incomes improve, and more inputs for production will be needed, thereby increasing domestic aggregate demand. This is like the "communicating vessel" effect.
Regarding goods exports, what is your forecast for this second quarter?
I think that in the second quarter of 2024, the export situation will continue to be good and may be better because export orders from businesses are still increasing.
In fact, up to now, many businesses have orders until the end of the third quarter. Therefore, we also expect that exports of goods in the third and fourth quarters will be higher, thereby creating better opportunities for exports.
Especially key export markets like the United States are experiencing high consumer demand. In the first quarter of 2024, Vietnam's exports to this market grew very well.
According to data from the Ministry of Industry and Trade, in the first quarter of 2024, the United States was Vietnam's largest export market with an estimated turnover of 26.06 billion USD, accounting for 28% of the country's total export turnover and increasing by 25.5% over the same period last year (the same period in 2023 decreased by 21%).
The United States is also creating all conditions to promote trade activities between the two countries. On the other hand, Vietnamese enterprises also grasp the requirements and regulations of the export market. Therefore, I believe that Vietnam's export activities in the second quarter of 2024 in particular and the whole year of 2024 will make a breakthrough.
Thank you!
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