CIEM announces 2 optimistic GDP scenarios for 2024

On the morning of January 15, CIEM coordinated with the German International Cooperation Agency (GIZ) to organize the Workshop “Vietnam’s Economy in 2023 and Prospects for 2024: Reforms to Accelerate Growth Recovery”. This is one of the activities within the framework of the Macroeconomic Reform/Green Growth Program sponsored by the German Federal Ministry for Economic Cooperation and Development.

On behalf of the research team, Mr. Nguyen Anh Duong, Head of the General Research Department of CIEM, presented a summary of the Report "Vietnam's Economy in 2023 and Prospects for 2024: Reforms to Accelerate Growth Recovery".

Regarding Vietnam's outstanding results in 2023, Mr. Nguyen Anh Duong emphasized that Vietnam's economy has shown a clear growth recovery momentum in the second half of 2023. Gross domestic product (GDP) in 2023 increased by 5.05%, 1.45 percentage points lower than the set target (6.5%), but there has been improvement between quarters. Notably, the economic growth recovery momentum is not accompanied by increased inflationary pressure.

Mr. Duong stated that, in the context of general economic difficulties, foreign direct investment (FDI) is still a notable bright spot. The total registered FDI capital in Vietnam as of December 20, 2023 reached nearly 36.6 billion USD, an increase of 32.1% compared to 2022. FDI capital realized in 2023 is estimated at 23.18 billion USD, an increase of 3.5% compared to 2022, marking the highest realized FDI capital in the past 5 years. In 2023, Vietnam's total export turnover is estimated at 683 billion USD. The trade surplus is estimated at 28 billion USD. Both exports and imports decreased in 2023, but there was a significant improvement in the last months of the year and between months of the year. FTAs have contributed significantly to the recovery of export activities as well as the diversification of Vietnam's export markets.

Based on that reality, CIEM experts have proposed two scenarios to forecast Vietnam's economic outlook in 2024. The forecast results show that GDP growth in 2024 could reach 6.13% in Scenario 1 and 6.48% in Scenario 2. Exports for the whole year are forecast to increase by 4.02% in Scenario 1 and 5.19% in Scenario 2. Trade surpluses are forecasted at 4.02 billion USD and 5.19 billion USD, respectively. Average inflation in 2024 is forecast at 3.4% and 3.72%, respectively.

Speaking at the workshop, Dr. Tran Thi Hong Minh, Director of CIEM, stated that in 2023, in the context of a rapidly changing and unpredictable world , Vietnam remains steadfast in its reform orientations and management solutions to promote socio-economic recovery and development, associated with maintaining macroeconomic stability, controlling inflation, and ensuring major balances.

“Located in a vibrant economic integration region, Vietnam remains a bright spot in promoting FTAs, associated with improving the independence and autonomy of the economy. In fact, Vietnam does not only rely on fiscal and monetary solutions to promote economic growth, but has also created many new driving forces from economic institutional reforms…” - CIEM Director emphasized.

According to the Director of CIEM, the above driving forces come from promoting innovation, developing new economic models, reforming the business environment, restructuring the economy, and perfecting regional planning and institutions.

In particular, the Government has also frankly and receptively acknowledged the issues that need to be resolved, including the backlog of documents, discipline in public service activities, difficulties in capital absorption, etc., in order to have directions and research to resolve them.

According to Ms. Minh, the recommendations of many experts on increasing fiscal and monetary expansion to stimulate economic growth are also based on assessments of fundamental improvements in institutional quality and capacity for reform and macroeconomic management.

The report “Vietnam’s Economy in 2023 and Outlook for 2024: Reforms to Accelerate Growth Recovery” emphasizes that policy priorities need to continue to focus on promoting economic growth recovery, on the basis of solidly improving the microeconomic foundation and reforming the economic institutional system towards being more friendly to innovation and the environment, associated with effectively handling risks in the volatile international economic environment./.

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