Economy 2024: The race to the finish line

Vietnam's economy is just a few steps away from achieving its 2024 targets. Time is running out, but continued effort is needed to maximize results.

Vietnam's economy is just a few steps away from achieving its 2024 targets. Time is running out, but continued effort is needed to maximize results.

The acceleration in the manufacturing sector is noteworthy, with the industrial production index for the first 11 months increasing by 8.4% compared to the same period last year.

"Growth Star"

Continuing its positive outlook for the Vietnamese economy, HSBC Bank has raised its forecast for Vietnam's economic growth in 2024 to 7% in its recently published report, instead of the previously projected 6.5%.

According to HSBC experts, this positive result was driven by manufacturing, exports, and foreign direct investment. The acceleration in the manufacturing sector is particularly noteworthy, with the industrial production index for the first 11 months increasing by 8.4% year-on-year. Meanwhile, imports and exports have also been positive, and foreign investment attraction continues to grow.

Highlighting that this year marks the third consecutive year that foreign investment disbursement has exceeded $20 billion (in the first 11 months of this year, disbursed foreign investment was $21.68 billion), HSBC experts predict that investment flows into the manufacturing sector are likely to continue growing.

Referring to Shunsin, a subsidiary of Foxconn, which is said to have applied for an $80 million investment license to manufacture integrated circuits in Bac Giang province, as well as the interest of major corporations such as Google and NVIDIA in Vietnam, HSBC emphasized, "manufacturing capacity in Vietnam is improving."

Thanks to the continuously increasing production capacity in recent years, merchandise trade has always been a bright spot in the Vietnamese economy. This year is no exception. According to figures recently released by the General Department of Customs, as of December 15, 2024, the total value of goods exports and imports nationwide reached over US$747.13 billion, an increase of 14.7%, or 95.98% in absolute terms, compared to the same period in 2023. Of this, export value reached US$385.35 billion, an increase of 13.9%, or US$46.92 billion, compared to the same period in 2023, moving closer to the US$400 billion mark.

When production and exports are boosted, economic growth will be more positive. Many forecasts indicate that Vietnam's economic growth is almost certain to reach 7% this year. Mr. Luong Van Khoi, Deputy Director of the Central Institute for Economic Management Research (CIEM), also believes that economic growth this year will see a major breakthrough, with a forecast of 7%, regaining the growth momentum seen before the Covid-19 period.

"Compared to other ASEAN countries, according to the International Monetary Fund's (IMF) forecast in October 2024, Vietnam's economic growth is among the highest in the region," said Mr. Luong Van Khoi.

In its latest report, Oxford Economics also suggests that Vietnam's economic growth will be higher than the overall growth of the ASEAN-6 group of six largest economies, perhaps not only this year but also in the coming years. The research firm also mentions "new trends" in semiconductor manufacturing, artificial intelligence (AI), and other growth drivers such as manufacturing, exports, consumption, and trade.

The final jump

Although the economic forecasts for Vietnam in 2024 are positive, achieving the best possible results, one of which is a GDP growth rate exceeding 7%, still requires significant efforts in the "final leap."

In a recent exchange with the press, Deputy Minister of Planning and Investment Tran Quoc Phuong stated that, upon reviewing all growth drivers from now until the end of the year, there are opportunities to "further increase growth." This is because the export market is currently relatively strong, and "with a little more effort, further growth could be achieved."

In the context of increasing external challenges, boosting public investment and implementing supportive fiscal and monetary policies are necessary measures to further stimulate domestic demand.

- The Asian Development Bank (ADB) made this assessment when releasing its economic forecast for the Asia-Pacific region, including Vietnam.

Similarly, attracting foreign investment is crucial, as is domestic investment and consumer spending. “When the global investment market is sluggish, foreign investment in Vietnam is very strong. This allows us to confidently say that investment momentum is very positive, contributing to overall growth for the year,” Deputy Minister Tran Quoc Phuong said.

The Deputy Minister also appreciated the improvement in domestic investment, with the number of newly registered businesses recently increasing again, thereby demonstrating the business community's confidence in Vietnam's economic prospects. Meanwhile, regarding consumer spending dynamics, opportunities to boost domestic consumption can be leveraged during Christmas and New Year holidays.

Not only is domestic consumption a positive sign, but the fact that Vietnam received over 1.5 million international visitors in November 2024 alone is also a positive indicator. If we strive harder in December and welcome 2 million visitors, we could reach the target of 18 million international visitors for the whole year. And when both the service sector and domestic consumption improve, it will contribute to "increased growth".

Furthermore, the disbursement of public investment is also one of the important drivers of growth. While 12-month figures are not yet available, in the first 11 months, the disbursement rate of public investment capital reached 60.43% of the plan assigned by the Prime Minister. In particular, the disbursement of capital for tasks and projects under the Socio-Economic Recovery and Development Program reached over 87% of the plan.

Unlike other economic indicators, which are finalized on the last day of the year, the disbursement of public investment capital will be finalized on January 31, 2024 (the end of the 2024 budget year). Therefore, there is still more than a month left to meet the deadline. If efforts are made to disburse 95% of the planned total of 670,000 billion VND for 2024, as targeted by the Government, it will positively support economic growth.

It's not just about "further stimulating domestic demand," but boosting public investment not only contributes to short-term economic growth, but also lays the foundation for future economic growth and development.

Source: https://baodautu.vn/kinh-te-2024-chang-dua-ve-dich-d233797.html