Experts outline Vietnam's economic growth drivers in 2024

At the Vietnam Investment Forum 2024 with the theme "Tracking the Cash flow", speakers analyzed Vietnam's economic picture in the new year.

Vietnam Investment Forum 2024. (Photo: Dai Viet)

Economist Nguyen Xuan Thanh, lecturer at Fulbright University Vietnam, said that the first driving force for Vietnam's economic growth in the last two months of 2023 and 2024 is exports.

In October 2023, exports increased by more than 5.9% compared to the same period last year. Enterprises' inventories decreased, orders returned, especially in the US market. Many shipping lines are also optimistic again, showing signs of improving exports. In November and December 2023, exports will have a strong "acceleration".

According to Mr. Thanh, by 2024, Vietnam can achieve export growth of 5-7% and not be negative like in 2023. This can be achieved thanks to the recovery of exports to the US market. In addition, if the Chinese economy improves, it will also create more motivation for Vietnam to export more goods to this market.

The second driving force comes from the disbursement of public investment capital. This is a very important factor to promote economic development in the current period. However, the impact of public investment capital often has a lag of about 5 months.

“ In the first quarter, there will be almost no disbursement. By the time we prepare for the second quarter, the money will only be released in the third and fourth quarters. Due to the delay in public investment, the figure of 32 billion USD will impact the economy at the end of this year and early next year, ” Mr. Thanh said.

Economist Nguyen Xuan Thanh, lecturer at Fulbright University Vietnam. (Photo: Dai Viet)

According to Mr. Thanh, the National Assembly will soon approve the 2024 budget. However, next year there will be no "Socio-Economic Recovery and Development Program", so the scale of public investment will be lower, only about 29 billion USD. However, this is still a very large number.

Expert Nguyen Xuan Thanh also commented that the recovery of exports and the return of orders will cause industrial workers to return, creating a "boost" for consumption. If the National Assembly approves the 2% VAT reduction, this will also be the next boost for the first 6 months of 2024.

Mr. Thanh assessed that in Vietnam, policies for each subject will be difficult to disburse, but tax reduction will bring very good results. In addition, the USD not appreciating strongly will limit pressure on monetary policy, creating room for the State Bank of Vietnam (SBV) to maintain an expansionary monetary policy.

Mr. Thanh said that interest rates have hit "bottom", but if low interest rates can be maintained throughout 2024, this will be a positive signal for economic development.

According to Mr. Tran Hoai Nam, Deputy General Director of HDBank , there is currently not much room to reduce interest rates. Lending interest rates have a lag compared to deposit interest rates. Lending interest rates will gradually decrease from now until the end of 2023 and into the first quarter of 2024. After that, it is very difficult to make long-term forecasts, depending on domestic and international macroeconomic fluctuations.

Mr. Nam commented that currently, commercial banks have “excess” liquidity. However, when macroeconomic factors develop more positively combined with a low interest rate environment, the demand for credit disbursement will increase.

According to the speakers, under normal conditions, the State Bank will try not to increase the operating interest rate, but if pressure arises, the State Bank will be forced to change to adapt. This must be observed every month of 2024 to be able to judge.

The stock market is also an investment channel that speakers and investors are interested in at the Vietnam Investment Forum 2024. This market is assessed to have many prospects thanks to the main drivers that will impact the economy.

Ms. Ta Thanh Binh, Director of the Securities Market Development Department under the State Securities Commission (SSC), commented that the Vietnamese stock market will have many positive signals in the coming time thanks to controlled inflation, reduced lending interest rates, flexible monetary policy management, increased disbursement of public investment capital, and support programs of the Government...

The State Securities Commission is and will continue to synchronously deploy many solutions to promote market development in a sustainable, safe, transparent manner, protecting the rights and legitimate interests of investors.

Specifically, the State Securities Commission will step up information and propaganda work on macroeconomic policies and economic management; coordinate with relevant organizations to resolutely implement solutions to soon upgrade the Vietnamese stock market according to the set roadmap.

At the same time, the State Securities Commission will closely monitor information and combat false rumors in the stock market. Especially rumors and bad news aimed at profiteering and causing psychological instability in the market. Some typical cases will be strictly handled to create deterrence and strengthen discipline in the market.

The State Securities Commission will also strengthen supervision and inspection of capital mobilization and use activities of issuing organizations; strengthen inspection of the quality of financial reports and auditing activities; and restructure securities companies and fund management companies according to the project approved by the Prime Minister.

DAI VIET

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