Vietnam Socioeconomic Forum 2023 seeks solutions

National Assembly Chairman Vuong Dinh Hue at VSEF 2023

VSEF 2023, themed "Reinforcing internal capacity and generating drivers for growth and sustainable development", is taking place today in Hanoi with the participation of Politburo members, representatives of all ministries and agencies, and about 400 delegates.

At the openning of the VSEF, National Assembly Chairman Vuong Dinh Hue said that since the fourth quarter of 2022, Vietnam's growth drivers and industrial production have fallen as major export markets for the country have shrunk and numerous supply chains have been broken.

"Thanks to timely policies, Vietnam has overcome the difficulties caused by these obstacles and achieved some important and quite comprehensive results," Vuong Dinh Hue said.

The economy has maintained its growth momentum and is a bright spot amidst the gray global picture. The macroeconomy is stable, inflation is controlled, and national credit ratings continue to improve.

Furthermore, major balances are guaranteed, and the ratio of public debt, foreign debt, and budget deficit are all below the threshold allowed by the National Assembly. Bad debt is well controlled, and exchange rates are quite stable.

In the first eight months of 2023, foreign direct investment, the disbursement of public investment, and the services sector have reported positive changes.

Total retail sales of goods and consumer services in the first eight months increased by 10 per cent, international visitors to Vietnam are expected to soon reach and exceed the annual target of 8 million arrivals, and some key industrial areas have recovered and maintained rapid growth such as Haiphong, Bac Ninh, and Ho Chi Minh City.

However, the chairman of the National Assembly pointed out that the country is facing many challenges, with new fluctuations occurring more severely than forecast.

"We need to strengthen and promote internal forces to effectively unlock the external drivers of development. This is a top priority, especially in the current global context. Vietnam needs to solve its internal challenges and the medium- and long-term issues," chairman Hue emphasised.

At today's VSEF, numerous topics were discussed:

(i) Forecasts for the economic and financial situation in the region and around the world, as well as opportunities, risks and challenges for the Vietnamese economy over the 2023-2024 period;

(ii) The current socioeconomic situation, the challenges, and the key bottlenecks to a more resilient economy over the 2021-2025 period; and

(iii) The internal capacity and motivation to unlock resources, strengthen internal sources, and create motivation for socioeconomic growth and development.

After the forum, a summary report will be composed to prepare for the sixth session of the 15^th National Assembly and the planning of the country's socioeconomic development policies.

Ramp-up required for nation’s recovery programme The slow-paced implementation of the country’s gigantic initiative on socioeconomic recovery and development is affecting efforts to revive corporate performance and promote economic growth.

Setting a strong impression for socioeconomic advances Although the target of 6.5 per cent GDP growth in 2023 is challenging, the disbursement of public investment could still help Vietnam get as close to that goal as possible. Deputy Minister of Planning and Investment Tran Quoc Phuong explained to VIR’s Nguyen Huong how the gradual improvement of disbursement will be a strong premise for economic growth for the rest of the year and into 2024.

Pressure to achieve GDP growth of 6.5 per cent Amidst the challenges in the US and EU markets, and a slower than expected recovery in China, Vietnam is facing more pressure to drive growth in the domestic market over the remainder of the year.

World Bank forecasts growth of 4.7 per cent in 2023 According to the latest report by the World Bank, Vietnam’s economy is expected to grow by 4.7 per cent in 2023, with a slow recovery to 5.5 per cent in 2024 and 6 per cent in 2025.

Headwinds weakening Vietnam’s economic recovery Vietnam’s GDP growth was only 3.32 per cent in the first quarter compared to the same quarter of the previous year. Growth accelerated in the second quarter but only to 4.14 per cent – very far from the rapid pace of 7-8 per cent annually before 2020.