GDP likely to meet NA growth target

May 27, 2024 | 15:53
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Hoang Van Cuong, member of the National Assembly’s (NA) Finance and Budget Committee, assessed Vietnam's economic landscape following the first full quarter of 2024, and the country's growth prospects for the rest of the year.

How do you rate Vietnam's economic performance during the first four months of the year?

GDP likely to meet NA growth target

Production and business activities have added to the rebound momentum since the fourth quarter (Q4) of last year, with improving performances each month.

For instance, in April, the index of industrial production (IIP) grew 0.8 per cent on-month but showed a 6.3 per cent on-year improvement.

The IIP rose 6 per cent in Q1 this year when compared to 2023, with the processing and manufacturing sector growing 7 per cent, after contracting nearly 3 per cent last year compared to the year before.

Foreign direct investment was also a highlight during this period. In the first four months of this year, Vietnam saw over $9.25 billion from overseas, up 4.5 per cent on-year.

Of this figure, newly registered volume approximated $7.1 billion, committed to about 970 projects, soaring 73 per cent in the capital value, and up nearly 29 per cent in the number of projects compared to 2023.

The import/export sector was also a stellar performer, with total import export value touching just below $239 billion in the first four months, up more than 15 per cent on-year, in which export values grew 15 per cent and import values rose 15.4 per cent.

Are you happy with the rate of public investment disbursement during the same period?

That also demonstrated encouraging results. The Ministry of Finance’s figures show that during this period, the total of disbursed public investment came to around $4.83 billion, equal to 16.4 per cent of the projection, and equal to 17.5 per cent of the task assigned by the Prime Minister.

The disbursement rate of public investment so far this year has been the best in recent years, providing important growth motivation in the forthcoming period.

Do you agree with the growth targets set by the NA for 2024?

The NA is aiming for GDP growth ranging from 6.0-6.5 per cent for the year.

In Q1, GDP expanded 5.66 per cent, the best performance since 2020. It is most likely that economic growth will hit about 6 per cent for the year, so the 6.5 per cent target set by the NA could be challenging.

Although the economy seems to be getting back on track, it still faces myriad hardships, such as the US-China spat.

Furthermore, domestic consumption has yet to rebound to pre-pandemic times. Figures from the General Statistics Office show total retail sales and service revenue rose by just 8.5 per cent in Q1, much lower when compared to last year, which saw a jump of 13.3 per cent and the average growth pace of 11 per cent per year in pre-pandemic years.

In addition, credit growth was also the lowest in many years in a low-interest environment. This attests to low demand from businesses.

Another factor the number of firms exiting the market remains larger than those entering it, with 21,600 versus 20,300.

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By Manh Bon

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