Give it your all in the final stretch to the finish line.

In an interview with TG&VN, the Director General of the General Statistics Office ( Ministry of Planning and Investment ), Nguyen Thi Huong, emphasized that 2024 is a breakthrough year in the 5-year economic plan from 2021-2025, and the service sector continues to be a bright spot.

Kinh tế Việt Nam năm 2024: Dốc toàn lực cho chặng đường về đích

Director General of the General Statistics Office, Nguyen Thi Huong. (Photo: Provided by the interviewee)

Vietnam's foreign direct investment (FDI) attraction in 2023 saw an impressive increase . How do you assess this result?

As of December 20, 2023, the total registered capital for new investments, adjustments, and equity investments by foreign investors reached over US$36.6 billion, an increase of 32.1% compared to the same period in 2022. This is the highest amount of realized FDI capital ever recorded.

This is also a very important driving force to promote Vietnam's economic growth in 2023 and subsequent years, in the context of many difficulties and challenges facing the global and domestic economies.

The continued inflow of FDI into Vietnam affirms foreign investors' confidence in the stable macroeconomic policies; the open and safe investment environment; the Government and the Prime Minister's consistent support for the business community in overcoming difficulties, stabilizing and developing production and business; and the effective implementation of many fiscal and monetary policies aimed at supporting businesses.

These factors have positively influenced foreign investors' decisions to make new investments, as well as expand existing projects in Vietnam.

During the year, several projects attracted very high registered capital, such as: the liquefied natural gas (LNG) thermal power plant project in Thai Binh from Japan; the JINKO SOLAR Hai Ha Vietnam photovoltaic cell technology complex project; the Lite-on Quang Ninh plant project; and the LG Innotek Hai Phong plant project. These four large projects attracted nearly $5.2 billion in investment during the year.

According to the General Statistics Office, total registered FDI capital in 2023 increased by 32.1% compared to the same period in 2022. This is the highest and most impressive increase since the Covid-19 pandemic emerged and broke out in 2020. This result was achieved thanks to the continuously improving and attractive investment environment with many outstanding advantages.

Simultaneously, in 2023, the Party and Government's economic diplomacy activities were strengthened, and Vietnam upgraded its comprehensive strategic partnership with Japan and the United States, which is expected to bring a new wave of high-quality investment into Vietnam. This could be an optimistic trend, and it is believed that FDI flows into the country will continue to grow well in 2024 and subsequent years.

In addition, public investment has effectively served as seed capital, helping to attract high levels of FDI throughout 2023.

Furthermore, Vietnam has participated in numerous Free Trade Agreements (FTAs) and has become a country that has signed FTAs with all major global economic partners such as Japan, China, the United States, the European Union (EU), Russia, etc. These agreements create favorable conditions to boost the attraction of foreign investors and expand investment opportunities in the S-shaped country.

Could you elaborate on the growth outlook for the whole of 2023?

In the context of a volatile and challenging global economy, with the involvement of the entire political system, the Government and the Prime Minister have proactively, flexibly, decisively, and closely directed ministries, sectors, and localities. Along with the unity, trust, and support of the people and the business community, many solutions have been implemented to overcome difficulties, promote growth, maintain macroeconomic stability, and ensure the major balances of the economy.

This has helped accelerate the recovery process and strengthen the economy's resilience to global challenges. Although many difficulties remain, Vietnam's economy in 2023 achieved positive results, showing a continued recovery trend with higher growth rates in each subsequent quarter.

In 2023, economic growth is estimated at 5.05% (specifically, Q1 at 3.41%; Q2 at 4.25%; Q3 at 5.47% and an estimated Q4 at 6.72%).

From the supply side , the agriculture, forestry, and fisheries sector continues to be the "pillar" of the economy, actively promoting restructuring while ensuring supply and food security, and achieving many positive results that have created stable growth in recent times.

The industrial sector showed a positive recovery trend in the final months of the year, resulting in an annual growth rate of 3.02%. The construction sector experienced exceptional growth due to accelerated disbursement of public investment capital, a cooling down of prices for key construction materials (iron, steel, cement, etc.) after a long period of price increases, low interest rates, and the attraction of foreign direct investment – all positive factors.

Several market service sectors continued to maintain stable growth rates in the fourth quarter, consistent with the growth seen since the beginning of the year.

The continued inflow of FDI into Vietnam affirms foreign investors' confidence in the country's stable macroeconomic policies. The image shows the Bac Tien Phong Industrial Park located within the Quang Yen coastal economic zone (Quang Ninh province). (Source: Hateco)

From the demand side , in 2023, consumption, while not yet fully recovered to pre-pandemic levels, remained fundamentally stable, reaching 3.52% for the year and contributing 2.07 percentage points to overall growth.

This steady increase is due to higher spending demand during the past summer and towards the end of the year to meet the needs of summer holidays, festivals, New Year's Day, and the upcoming Lunar New Year. Overall, consumer demand remains the main factor driving economic growth.

Accumulated assets in 2023 are estimated to increase by 4.09%, contributing 1.35 percentage points to overall growth. This is due to the determined efforts of the Government, ministries, sectors, and localities in vigorously promoting the implementation of public investment capital and capital in the recovery program, urging the progress of projects to be completed early to serve society, and having a ripple effect on economic sectors.

Furthermore, the preliminary trade surplus of approximately $28 billion in goods has made a positive contribution to Vietnam's economic growth, contributing 1.63 percentage points to the overall economic growth.

What opportunities and challenges will the economy face in 2023 , Madam?

Economic growth in 2023 was supported by several favorable factors:

Firstly, macroeconomic stability, combined with effective fiscal and monetary policies, has helped control inflation within safe limits, and the gradual reduction in policy interest rates provides a basis for lowering lending rates to support production.

Secondly , the agricultural sector continues to be the "backbone" of the economy, actively promoting restructuring while ensuring food supply and security, and achieving many positive results that have created stable growth in recent times.

Thirdly , the service sector is gradually recovering, with tourism being a bright spot.

Fourth , industrial activity is gradually recovering, and the industrial production index has shown a slight upward trend again.

Fifth , the government's efforts to accelerate the disbursement of public investment capital are a crucial driver of growth.

Sixth , effectively controlling inflation will help stabilize the money supply, which is crucial for economic growth.

Besides favorable factors, several difficulties and challenges have hampered growth, such as: geopolitical instability, difficulties in the global economy, weak recovery of aggregate demand; industrial production, although showing positive changes, is still slow and has not created a strong surge compared to the same period in 2022, mainly due to a decrease in orders...

Simultaneously, import and export activities are recovering slowly due to decreased global demand, tight monetary policy, and persistently high inflation. The real estate market remains sluggish, with limited cash flow, especially given the significant pressure of corporate bond maturities and repayments in 2023.

Furthermore, attracting foreign investment in 2023 was not effective as investors did not expand the scale of their investments in existing projects in Vietnam due to the general difficulties of the global economy and the business community.

In 2023, economic growth is estimated at 5.05%. (Photo: VNA)

What is your assessment of Vietnam's economic growth in 2024 ?

Forecasts for 2024 indicate that potential risks from the global economic environment remain present and continue to negatively impact Vietnam's economic growth recovery prospects. The consequences of the Covid-19 pandemic are still lingering. Inflation in some major economies is likely to remain high due to continued tight monetary policies. Public debt continues to increase.

The service sector is projected to remain a bright spot in 2024. Several trade sectors may maintain their growth momentum due to trade policies and the promotion of domestic consumption, such as: air transport, wholesale and retail trade, accommodation and food services, financial services, and tourism services.

Simultaneously, global trade growth continues its low trend, affected by intense and unpredictable geopolitical competition. Pressure from volatile crude oil and food prices, and prolonged interest rate increases in many countries... The prospects for global economic recovery remain unclear.

Domestically, although opportunities, advantages, difficulties, and challenges are intertwined, traditional driving forces remain weak, and new driving forces are not yet clear. Therefore, the Vietnamese economy is projected to face many difficulties and challenges in 2024.

The cumulative impact of the global economic downturn since the pandemic is likely to continue affecting the Vietnamese economy for at least the first half of 2024 before showing more positive signs.

Nevertheless, the economy will still have a better chance of a positive recovery if the support policies issued in 2023 have a clearer impact on the economy; if the drivers of investment, consumption, tourism, and exports continue to be strongly promoted; and if long-standing problems and shortcomings are addressed and improved in 2024, especially those affecting businesses, investment projects, the real estate market, and corporate bonds…

In the agriculture, forestry, and fisheries sector, which continued its positive growth momentum in 2023, the effectiveness of the agricultural development strategy and crop restructuring, which ensured both food supply and security while promoting sustainable agricultural development, exploitation, and aquaculture, is expected to keep agricultural, forestry, and fisheries production stable.

The industrial and construction sectors are projected to continue facing numerous challenges amidst a slow global economic recovery, weak global demand, shrinking world markets, and difficulties in the circulation and movement of goods in global trade due to rising prices and shortages of raw materials.

In particular, the domestic processing and manufacturing industry continues to face declining orders and high input costs. The downturn in the real estate market continues to affect many related manufacturing sectors.

In addition, many public investment projects that will be accelerated in 2024 will also contribute to our country's growth next year.

2024 is also a breakthrough year in the 2021-2025 five-year economic plan. Therefore, the Government, ministries, and localities will devote all their efforts to achieving this goal. These may be subjective advantages, but they also pose significant pressure on the country's economic activities.

In the context of global uncertainty, Vietnam needs to continue maintaining macroeconomic stability. This is a crucial foundation for achieving its growth targets.

Thank you, ma'am!

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