Dynamism part of growth ambitions

We have seen both bright and dark spots in the economic picture since the beginning of 2023. What internal difficulties are the country facing in this regard?

Deputy Minister of Planning and Investment Tran Quoc Phuong

In the first seven months of the year, there were several positive highlights in the economy, despite general difficulties. The macroeconomy continued to be stable, inflation continued its downward trend, the average consumer price index in seven months increased by 3.12 per cent, state budget revenue reached over VND1 quadrillion ($42.73 billion), equalling 62.7 per cent of the estimate. Import and export continued to increase to reach $194.73 billion in export value, $179.5 billion in import turnover, and $15.23 billion in trade surplus.

The main sectors and fields recovered well (including agricultural production, industry, trade, services, and tourism), investment capital achieved positive results, and business registration and development situation showed positive signs.

Besides these outcomes, we acknowledged some shortcomings. Macroeconomic stability, major balances remaining risks, and inflation tended to decrease but were still under many pressures. State budget revenue in the first seven months decreased on-year, along with high on-balance sheet bad debt ratio, weak capital absorption, difficult access to capital, and low credit growth.

Managing the monetary policy was a struggle as many countries continued to tighten their policies. Businesses are facing many woes, especially in terms of access to capital, and declining orders. Industry continues to recover, but there are still substantial declines in large markets.

In the first months of the year, numerous government policies have been implemented. How can you assess their impact?

The Ministry of Planning and Investment and other ministries and agencies have already raised numerous solutions and policies, and the government and prime minister have directed numerous measures on managing the macroeconomy, accelerating investment, including public investment, and ensuring social welfare, especially measures in socioeconomic development and recovery.

The effects of these policies have been good. The outcomes in the first seven months are encouraging, particularly in terns of the macroeconomy and curbing inflation. Going forward, the economy will face many difficulties, but there are still many driving forces for growth, including exports, consumption, public investment, and foreign direct investment.

The government is deploying many measures to make a breakthrough in economic growth, focus on key drivers, especially in public investment, to unlock resources and create opportunities for production and development, in addition to stimulating consumer demand, facilitating businesses to access credit, as well as delaying tax payment and land rent.

Public investment is an important driver. So, how can we use this to create a spillover effect for the whole of society, and reach high growth in the last months of the year?

The direct effect of public investment on GDP growth is not substantial, but its role is too significant, especially in socioeconomic development by developing the infrastructure and transport of the whole country and economy. In a direct way, public investment disbursement is benefiting construction enterprises and material suppliers. In an indirect way, all the economic activities, people and enterprises in numerous localities and across the country are gaining from public investment and infrastructural development.

By the end of July, the estimated amount was $11.3 billion, reaching almost 38 per cent of the yearly plan, higher than the same period in 2022 at 34.5 per cent. Disbursement in the first seven months of this year was $3.4 billion higher than the same period last year. We believe that public investment spending would be strong, and hit 95 per cent of its goal.

Since 2020, the disbursement in the first months has often been at 20-30 per cent only, but the speed in past months has multiplied considerably. We have to make a fundamental change in institutions and regulations so that the progress can be sped up from the beginning of every year.

Major policies and solutions have been issued, but the timing is slow. How can we ensure more dynamic implementation?

We have an awareness and have found solutions very early, and we have seen the huge impact and thought about what we have to do to recover in the past couple of years.

However, it takes a long time to come up with a policy and legal document built by various ministries and agencies, along with high coordination and consensus in the analysis and evaluation. So, people may feel that these policies were released a bit late. Now, we are still seeing and enjoying the effects of the policies, as with the economic recovery and development programme.

To enhance the implementation and effectiveness of all policies, state management agencies should pay attention to designing and formulating policies in a sensible and effective way, especially finding resources for implementation. They also need to pay close attention to the direction of the government, and ministries in implementation, along with organisation, monitoring, and evaluating.