Vietnam News

Vietnam projects economic growth of up to 6.5%

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The Planning and Investment Ministry has outlined three potential economic growth trajectories for 2024, with the peak gross domestic product (GDP) growth rate forecast at 6.5%.

These projections stem from the government’s socioeconomic development strategy for the 2021-2025 period, combined with endeavours to meet the 2023 growth goal of 6.5%.

Given the challenges faced by the Vietnamese economy between 2021-23, 2024 is anticipated to be a pivotal year for the country’s to accomplish the objectives of its five-year plan.

In the first scenario, Vietnam’s GDP is predicted to rise by 6%.

The estimate presumes that global growth will be moderate in 2023 and the resurgence of global trade and investment will continue to face hurdles. Although the domestic market and services sector might exhibit robust growth, the import, export, and industrial production sectors may not experience a marked recovery due to their reliance on global market demand.

The Planning and Investment Ministry believes a GDP growth target of 6% would be fitting, given the expected continued risks the global and domestic economies may encounter during the recovery phase.

Under the second scenario, the ministry envisages a GDP growth of 6.5%, assuming both global and regional economies rebound quicker than international organisations’ predictions. This scenario also considers a surge in demand, trade, and investment. Concurrently, the domestic market would likely experience revivals in demand, production, business activities, exports, investment, and foreign direct investment influx.

For the third scenario, the GDP growth is projected to range between 6%-6.5%, reflecting predictions of swift changes in both global and domestic contexts. The ministry favours the third scenario.

While optimism regarding economic recovery is on the rise, various organisations and specialists remain wary about the prospects for Vietnam’s economy.

In mid-July, the Asian Development Bank adjusted its 2023 forecast for the Vietnamese economy downwards from 6.5% to 5.8% and its 2024 projection from 6.8% to 6.2%.

Similarly, in early April, the World Bank anticipated moderate 4.7% growth for Vietnam in 2023, progressively increasing to 5.5% in 2024 and reaching 6% by 2025.

The World Bank’s report pointed out that a proactive fiscal policy supporting short-term demand, removing barriers to the implementation of public investment and addressing infrastructure constraints could help the economy achieve these targets and prolong long-term growth.

Economist Can Van Luc forecasts Vietnam’s GDP growth rate at 6% in 2024 and 6.5% in 2025.

The growth rates could be higher if Vietnam manages to consolidate existing growth drivers and exploit new drivers that would come from promoting the digital economy, improving labour productivity, the private sector, the institutional improvements and the development of the green economy.

According to chairman of the National Assembly’s Economic Committee Vu Hong Thanh, the economy’s recovery depends significantly on global trends and solutions to tackle internal problems.

The pressure on macroeconomic management, inflation control and growth promotion would increase in the remaining months of this year, requiring hastened efforts to achieve the target set at 6.5% and implement the plan for the 2021-2025 period, Thanh said.

Thanh added that the focus in the remaining months of this year should be to speed up disbursements of public investments, increasing domestic demand and accelerating production.

 Viet Nam News – September 20, 2023

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