Actively promote economic growth

In the context of the world situation continuing to develop in a complex and unpredictable manner; with more difficulties and challenges than advantages and opportunities; therefore, the requirement for economic management in the last months of the year is to effectively exploit opportunities, especially promoting growth momentum from investment and domestic consumption to strive for higher growth in 2024, consolidating and maintaining growth momentum in 2025.

Operating a solar panel production line at JA Solar Vietnam Co., Ltd. in Viet Yen Industrial Park, Bac Giang province. (Photo: DANG ANH)

Continue to prioritize promoting growth associated with maintaining macroeconomic stability, controlling inflation, ensuring major balances of the economy, striving for growth in the fourth quarter of 2024 of about 7.5-8% so that the whole year's growth reaches and exceeds 7%.

Raising growth forecast

Despite facing many difficulties and challenges, the economy is still recovering, achieving a high growth rate in the third quarter. Basically, the Vietnamese economy has regained growth momentum as in the period before the Covid-19 pandemic with many bright spots, especially in industrial production, exports and attracting foreign direct investment (FDI). According to the General Statistics Office, in the first 9 months of 2024, the economy achieved positive growth in the context of the agricultural , forestry and fishery sectors declining due to unusual weather factors but offset by impressive growth in the industrial and service sectors; in which, the industrial sector had a growth rate of 9.59%, the highest since the beginning of the year.

In the East Asia and Pacific Economic Update report released in October 2024, the World Bank (WB) stated that Vietnam's expected growth in 2024 and 2025 is still lower than the pre-pandemic level. However, the WB has raised its forecast for Vietnam's economic growth compared to the forecast released in April 2024, from 5.5% and 6% to 6.1% and 6.5%. The International Monetary Fund (IMF) also forecasts Vietnam's economic growth to reach 6.1% in 2024 due to strong external demand, stable foreign direct investment, and the government's application of fiscal easing and monetary support policies.

Domestic demand is expected to gradually recover as businesses partly overcome credit difficulties and the real estate sector is expected to fully recover in the medium term. The IMF forecasts that inflation in 2024 is expected to fluctuate around the target of 4-4.5%; however, the economy also faces the risk of a slowdown in growth as the main driver, exports, may weaken due to uncertain global growth prospects due to geopolitical tensions or trade disputes. Along with that, monetary easing may put pressure on the exchange rate, causing domestic inflation to increase. UOB Singapore Bank in its recent forecast update also adjusted the forecast for Vietnam's economic growth in 2024 from 5.9% to 6.4% thanks to the positive cumulative results achieved in the third quarter.

Deputy Minister of Planning and Investment Tran Quoc Phuong said that based on the results of the third quarter, the Ministry of Planning and Investment updated the growth scenario and recommended striving for growth in the fourth quarter of 2024 of about 7.5-8% so that the whole year's growth reaches and exceeds 7%. This recommendation is based on the following factors: Positive growth trends from economic sectors; agricultural production and tourism in the North need to quickly overcome the consequences of Typhoon Yagi (Typhoon No. 3) and recover faster; investment of the state sector must be promoted more strongly; bright spots in attracting FDI and exports maintain a positive growth rate; promote and exploit the domestic market more effectively; achieve and exceed the target of attracting international tourists...

The momentum from two economic locomotives

Due to the impact of typhoon Yagi, the fourth quarter's directives have a new task, focusing on overcoming the consequences of the storm, accelerating the recovery of production and business, and actively promoting economic growth. "There is a point in the Government's directive solution that the Ministry of Planning and Investment advised that localities not affected by the storm and with high growth potential need to share and make more efforts to compensate for the losses of affected localities. Accordingly, there are two key localities that, if they achieve higher growth, will have a very positive impact on the growth of the whole country, including Hanoi and Ho Chi Minh City. These are the two locomotives, the main growth drivers of the whole country," said Deputy Minister Tran Quoc Phuong.

However, according to economic experts, it will take a lot of effort to get this compensation because in recent years, Ho Chi Minh City and Hanoi have both grown below their potential. In the first 9 months of 2024, the estimated growth of Hanoi's gross regional domestic product (GRDP) was lower than the overall growth of the whole country, reaching only 6.12% over the same period, GRDP growth of

Ho Chi Minh City achieved more than 6.8%. Currently, departments, branches and sectors in the city are making efforts to implement the contents of Directive No. 12 dated August 12, 2024 of the Ho Chi Minh City People's Committee on implementing tasks and solutions for economic growth until 2025; in which, aiming to strive to achieve GRDP growth of at least 7.5% in 2024 and 8-8.5% in 2025; the proportion of digital economy reaches 22% and 25% respectively; the industrial production index (IIP) in 2024 increases by 6.5%...

General Statistics Office Director Nguyen Thi Huong commented that although GDP growth in the past three quarters was positive, Vietnam's economy still has some points to note in the last months of 2024, especially when the main growth drivers, including exports, are forecast to slow down and the service sector has not grown as strongly as expected. To promote economic growth in the last months of 2024 and create momentum for growth in the following years, the Government, ministries, branches and localities need to implement a series of comprehensive and synchronous solutions.

Specifically, ensuring macroeconomic stability, controlling inflation well and stabilizing exchange rates; continuing to implement policies to control inflation and maintain stable prices to ensure that people's purchasing power is not reduced; ensuring a stable supply of foreign currency to avoid exchange rate fluctuations, affecting the import of raw materials and the export of goods. In addition, it is necessary to promote consumption through effective implementation of stimulus programs such as discounts, promotions, and consumption incentives; promoting the distribution of goods through digital platforms and e-commerce to increase purchasing power to boost domestic consumption. It is necessary to promote disbursement of public investment, increase the disbursement speed of investment projects, especially transport infrastructure projects; support businesses to improve competitiveness through promoting the application of technology and innovation, green transformation, and digital transformation.

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