Forecasting Vietnam's economic growth scenario in 2024

2024 is a year of acceleration and breakthrough, which is of special significance in successfully implementing the 5-year Socio- Economic Development Plan 2021-2025. However, the international and domestic context still has many difficulties and challenges, so to complete the set goals, it requires more active participation of ministries, branches and localities.

Export vest factory at Garment Corporation 10.

Operating scenario: GDP growth 6%-6.5%

The Government assessed that the world and regional situation will continue to have complex and unpredictable developments; the consequences of the Covid-19 pandemic will have long-term impacts. Strategic competition among major countries is increasingly fierce, and conflicts in Ukraine and the Gaza Strip are likely to continue. Global economic growth, trade, and investment continue to decline. Inflation and monetary policies of some major economies still contain uncertain factors...

Domestically, the economy has opportunities, advantages and difficulties, challenges intertwined, but difficulties and challenges are greater. Inflationary pressure remains high; production and business are forecast to be difficult; demand in Vietnam's large, traditional import and export markets continues to decline.

The existing shortcomings, limitations and inadequacies of the economy in terms of economic structure have accumulated for a long time and have not been completely resolved; the financial, monetary and real estate markets still have potential risks; the scale of our economy is still modest but its openness is large, its competitiveness and its resilience to external shocks are still limited...

To successfully implement the goals and tasks of the socio-economic development plan and the state budget estimate for 2024, the Government requires ministries, branches and localities to be determined to overcome all difficulties and challenges, maintain the spirit of overcoming difficulties, solidarity, self-reliance, proactive adaptation, flexibility, drastic, scientific and effective actions, actively innovate and create according to the theme "Discipline, responsibility; proactive and timely; accelerated innovation; sustainable efficiency.

Regarding the direction of promoting socio-economic development in 2024, Resolution No. 103/2023/QH15 of the National Assembly on the Socio-Economic Development Plan for 2024 and Resolution 01/NQ-CP of the Government both emphasize the priority of promoting growth and stabilizing the macro-economy.

In particular, attention should be paid to solutions to promote green and sustainable economy; focus credit capital on priority areas of green transformation and sustainable development; emphasize energy security and promote energy transformation; soon have solutions to prioritize attracting investment and speed up green projects...

Notably, the Resolutions of the National Assembly and the Government both highlight solutions to take advantage of the great achievements in economic diplomacy in 2023 with two important groups of solutions: continuing to promote the manufacturing and processing industry and training human resources.

Mr. Phan Duc Hieu, Standing Member of the Economic Committee of the National Assembly

In Resolution No. 01/NQ-CP on key tasks and solutions for socio-economic development and state budget in 2024, the Government sets out 6 viewpoints, key directions and 12 key tasks and solutions.

Based on the main targets of the 2024 socio-economic development plan approved by the National Assembly, the Government has developed two GDP growth scenarios corresponding to GDP growth of 6% and 6.5%.

Scenario 1: To achieve a 6% GDP growth rate for the whole year, GDP growth in the first quarter must reach 5.2%, in the second quarter 5.8%, GDP growth in the first 6 months must reach 5.5%, GDP growth in the third quarter must reach 6.2%, GDP growth in the first 9 months must reach 5.7%, and growth in the fourth quarter must reach 6.5%.

Scenario 2: To achieve a full-year GDP growth rate of 6.5%, GDP growth in the first quarter must reach 5.6%, in the second quarter 6.2%, GDP growth in the first 6 months must reach 6.0%, GDP growth in the third quarter must reach 6.7%, GDP growth in the first 9 months must reach 6.2%, and growth in the fourth quarter must reach 7%.

Forecasting 3 growth scenarios

Assessing that 2024 is not an easy year for the world economy in general and the Vietnamese economy in particular because the internal difficulties of the economy from 2023 will continue to last, the Central Institute for Economic Management (CIEM) has proposed 3 scenarios for growth forecast in 2024.

Accordingly, in the low scenario, GDP growth reaches 5.5% with growth rates according to economic sector structure including agriculture, forestry and fishery increasing by 3.21%; industry and construction growing by 5.44%; and service sector growing by 6.26%.

Baseline scenario (most likely scenario), GDP growth reaches 6% with growth by economic sector structure including agriculture, forestry and fishery sector increasing by 3.45%; industry and construction sector increasing by 5.71%; service sector increasing by 7.02%.

In the high scenario, GDP growth reaches 6.5% with growth rates according to economic sector structure including agriculture, forestry and fishery increasing by 3.61%; industry and construction growing by 6.67%; and service sector growing by 7.16%.

Dr. Nguyen Huu Tho, representative of the CIEM Research Group, noted that among the growth drivers, traditional growth engines such as Ho Chi Minh City and Hanoi have seen a gradual slowdown in growth while some new engines such as Hai Phong, Quang Ninh, and Thanh Hoa have emerged, but they are still few and not really strong.

To achieve high growth in 2024, CIEM's Research Team recommends that the Government focus on stabilizing the macro economy, controlling inflation, focusing more on economic growth drivers and promoting continued improvement of institutions and the business environment.

At the same time, focus on developing infrastructure to serve production; increase support for production and business entities and promote the development of the goods and services market.

In the Vietnam Economic Research Report 2023 and Prospects for 2024, Dr. Can Van Luc and the Authors' Group of the Institute of Training and Research of the Bank for Investment and Development of Vietnam said that international organizations such as the IMF, WB, OECD... all lowered the global economic growth outlook in 2024 to lower than in 2023, increasing by about 2.4-2.9%.

On the positive side, interest rates will fall as global inflation continues to fall (to around 3.5% from 5.5% in 2023), which will stimulate investment and consumption to gradually increase again.

For Vietnam, the domestic macroeconomic situation in 2024 is forecasted to be mixed with both advantages and difficulties and challenges. With the economic recovery momentum and more drastic efforts from the government, people and businesses, it is forecasted that Vietnam's economy in 2024 can achieve higher growth than in 2023 with 3 growth scenarios:

Baseline scenario: Continuing the recovery momentum in the second half of 2023, the increased efficiency of traditional growth drivers (export, investment, consumption) combined with the ability to promote new growth drivers (science and technology, digital transformation, green economy, private economy, productivity growth, regional linkages, etc.), Vietnam's GDP growth in 2024 is forecast to reach 6-6.5%.

Positive scenario: In a more favorable international and domestic environment, external risk factors are forecasted and well controlled; growth drivers are better exploited and promoted; the macro economy continues to maintain stability, major balances are ensured, business and people's confidence is strengthened...; GDP growth can reach 6.5-7%.

Negative scenario: If external risks increase and have more negative impacts, major economies recover slowly, geopolitical conflicts escalate, natural disasters and epidemics develop complicatedly and unpredictably, negatively impacting Vietnam's exports, investment, consumption and international tourism, while growth drivers have not yet been as effective as expected, Vietnam's economic growth in 2024 is forecast to only reach about 5-5.5%.

Source: https://baothainguyen.vn/kinh-te/202401/du-bao-kich-ban-tang-truong-kinh-te-viet-nam-nam-2024-b7d16f2/