Public investment: a bright spot to propel growth

A half year had passed, yet public investment has just reached 33 per cent of the full-year projection. Why has such a result been touted as a bright spot in the first-half development picture?

Phi Huong Nga

Higher GDP growth in the second quarter (Q2) over Q1 – 4.14 per cent versus 3.32 per cent – attests to the efficiency of a raft of policies and measures the government has consistently applied over the year-to-date.

Right from the first months of this year, ministries, sectors, and localities have focused on accelerating the public investment that was the key enabler to propel economic growth in Q2 and H1 this year.

In Q1, public investment still managed slow growth, yet in Q2, marked improvements were reported.

Particularly, in Q2 the country saw $6.1 billion in disbursed public investment volume, equal to around 20 per cent of the full-year plan. It showed a 53 per cent jump over the previous quarter and nearly 22 per cent on-year.

With such positive outcome, the disbursed public investment volume in H1 of this year surged by 20.5 per cent compared to the same period in 2022, approximating $10.1 billion.

What attributed to such a positive outcome?

Many projects in the National Programme on Socioeconomic Rebound and Development have now basically completed the required procedures and are concentrating on execution.

A raft of other projects in the Mid-Term Public Investment Plan for 2021-2025 have also finalised, creating new advantages to push up public investment this year.

Right from the outset of the year, the prime minister issued clear guidance, urging ministries, sectors, and localities to accelerate project implementation.

On March 14, the premier signed Decision No.235/QD-TTg on establishing five taskforce groups with the prime target of removing any difficulties to increasing public investment.

On March 23, the PM enacted Directive No.08/CT-TTg presenting major tasks and measures to propel the distribution and disbursement of public investment sources. He also implemented three national target programmes in 2023, as well as the National Programme on Socioeconomic Rebound and Development.

These are key guiding documents to engage the whole system at all levels.

Public investment is on the rise, but it seems challenging to reach the set target. What needs to be done to further raise the pace?

All ministries, sectors, and localities need to strictly implement the relevant government resolutions and guiding documents on the distribution, implementation, and disbursement of public investment sources, the national target programmes in 2023, and the National Programme on Socioeconomic Rebound and Development.

Experience shows that where the leaders are directly in charge of specific project groups, and strive to promptly remove problems, public investment is promoted.

Public investment is not only needed this year, it must be expedited for many years to come. Therefore, the state needs to focus on perfecting the regulatory system governing all public investment activities and related fields such as land use, environmental protection, bidding, and construction, as one slow link affects the whole process.

The 2023 tipping point for public investment It is anticipated that public investment will be further encouraged during 2023, signalling a significant advance for both the real estate sector and overall economic growth.

Deputy PM asks for closer coordination to speed up public investment disbursement Deputy Prime Minister Tran Hong Ha has asked ministries and central agencies to work closely with localities to remove obstacles for particular projects, thus speeding up public investment disbursement.

Green growth topping the agenda for investment push Green growth and investment are in a fierce race that has been going on quietly for many years, but it is now speeding up to enable Vietnam to reach its committed goals.

Public investment deemed key driver for economic growth and inflation control Rebounds in retail and consumption services and in the disbursement of public investment are expected to put pressure on the country’s efforts to bring inflation under control this year.