Vietnam growth drivers travelling in right direction

The state budget deficit, public debt, government debt, and foreign debt are all significantly lower than the permissible thresholds. The consumer price index rose by 4.04 per cent on-year over the eight-month period, in line with the National Assembly’s target.

In addition, the exchange rate has been managed proactively and flexibly, responding promptly to global market fluctuations. State budget revenue in the first eight months was estimated at 78.5 per cent of the annual target, a 17.8 per cent on-year increase. Total import-export turnover grew by 16.7 per cent, with exports and imports up by 15.8 per cent and 17.7 per cent, respectively, and the trade surplus is estimated at $19.07 billion.

Growth drivers, particularly from the supply side, continued to show positive trends. Agricultural production and services maintained strong momentum, while industrial production rebounded swiftly. The industrial production index increased by 9.5 per cent in August compared to last year, and by 8.6 per cent over the first eight months. The processing and manufacturing sector, a key contributor, saw a 9.7 per cent increase.

Foreign direct investment (FDI) remained a bright spot, with approximately $20.5 billion in total registered capital during the first eight months, up 7 per cent on-year. Newly registered FDI reached nearly $12 billion, a 27 per cent increase, while disbursed FDI amounted to about $14.15 billion, an 8 per cent rise.

Despite these positive developments, the economy continues to face challenges. Growth drivers have not yet seen significant acceleration. Therefore, all levels of government, sectors, and localities need to work more closely with businesses, fostering innovation and breakthrough thinking to fully achieve their goals. This will contribute to a stronger economic recovery, with growth targets of 6.8-7 per cent or even higher for the full year.

Growth requirements for the final months of 2024 and the coming years are considerable. The Ministry of Planning and Investment (MPI) emphasised the importance of seizing advantages and opportunities to accelerate growth drivers, exceeding 2024 targets and laying the groundwork for 2025.

The MPI has outlined several key tasks for September and the fourth quarter, and the priority is careful preparation for the upcoming Central Committee meeting and the National Assembly’s next session.

Ministries and agencies should collaborate with National Assembly bodies to finalise major policy groups, including the Law on Public Investment, the Law on Planning, and policies on public-private partnerships and bidding. New regulations on decentralisation, resource management, and investment attraction are expected to provide fresh impetus for development.

Additionally, resources should be prioritised for improving mechanisms, policies, and laws to create a more open environment that attracts large-scale and high-tech projects. Immediate action is required to address legal challenges and obstacles in various projects to unlock remaining resources for growth.

Continued efforts are needed to bolster traditional growth drivers, such as investment, consumption, and exports. Furthermore, the MPI emphasised the importance of tapping into new growth drivers, including the digital economy, digital transformation, green transformation, and also promoting regional connectivity.

Vietnam’s economy is forecast to grow by 6.1 per cent in 2024, rising to 6.5 per cent in 2025–2026, according to a report by the World Bank issued on August 26.

Despite global turbulence, Vietnam is emerging with stable growth and is a favoured destination for diverse foreign direct investment (FDI) flows, particularly from Singapore, China, and Japan, according to a recent seminar.