Vietnam's economy is on track for rapid recovery in the first 6 months of the year.

The head of the IMF's Vietnam Macroeconomic Consultation and Monitoring Mission affirmed that after a difficult period in late 2022 and early 2023, Vietnam's economy in the first half of this year is on track for rapid recovery.

Transporting import and export containers at Gemalink International Port, Phu My town, Ba Ria-Vung Tau province. (Photo: Hong Dat/VNA)

After a difficult period in late 2022 and early 2023, Vietnam's economy in the first half of 2024 is on track for a rapid recovery.

The above statement by Mr. Paulo Medas, Head of the Vietnam Macroeconomic Consultation and Monitoring Delegation of the International Monetary Fund (IMF), when talking to VNA reporters in Washington DC, has somewhat summarized the picture with the main bright colors of the Vietnamese economy in the first 6 months of this year.

Many international experts also affirmed that in the context of the world economy gradually recovering after the "hit" of the COVID-19 pandemic, but still unstable, with many potential risk factors, from geopolitical conflicts, to the possibility of the US Federal Reserve (Fed) cutting interest rates, leading to fluctuations in gold, oil, exchange rates, etc., the fact that Vietnam's economy in the past 6 months achieved a growth rate of 6.42% compared to the same period last year is clearly a very positive and remarkable result.

Speaking while co-chairing a dialogue with about 20 leaders of major economic groups with Prime Minister Pham Minh Chinh within the framework of the 15th Annual Pioneers Meeting of the World Economic Forum (WEF Dalian 2024) last June, Professor Klaus Schwab, founder and Chairman of the WEF, once again emphasized that Vietnam is “a fast-growing bright star of the world economy.”

In fact, the Vietnamese economy in the first half of 2024 has faced many great pressures, both internally and externally. In addition to the common challenges, the Vietnamese economy also faces internal difficulties, including rising inflation (although still under control), causing weak aggregate demand and slow recovery; rising airfares affecting domestic tourism; low credit growth; the trend of people pouring their savings into gold and foreign currencies, causing capital mobilization for production and business to decline.

However, Vietnam's Gross Domestic Product (GDP) growth in the second quarter still recovered strongly, reaching 6.93%, and the first 6 months of this year reached 6.42%, much higher than the same period last year (3.84%) and exceeding the scenario (5.5-6%) set by the Government in Resolution No. 01/NQ-CP.

The fact that Vietnam's economy has defied "headwinds" and accelerated faster than forecast is a clear demonstration of the effectiveness of policies and drastic actions from the central to local levels. As Mr. Kim Yong Jae, Standing Member of the Financial Services Commission of Korea (FSC), said, "This economic growth is the result of the efforts of the Vietnamese government and people."

The garment industry will contribute a lot to economic growth. (Photo: Tran Viet/VNA)

Thanks to the drastic participation of the entire political system to carry out the tasks and solutions set out, with the highest determination, Vietnam's macro-economy in the first half of this year has been maintained stable, exports continued to increase strongly (14.5%), with a large trade surplus of up to 11.63 billion USD, contributing to ensuring the balance of payments.

The service and tourism sectors have recovered strongly, public debt and state budget deficit have been well controlled, much lower than the limit, especially attracting foreign investment capital reaching nearly 15.2 billion USD, up 13.1% over the same period last year, showing that foreign investors continue to trust in Vietnam's investment environment.

HSBC Bank's global research department also affirmed that with the strengths of the economy, the Vietnamese market has really attracted foreign investors. Meanwhile, the KRF Center, which specializes in researching global issues, explained that Vietnam has a strategic geographical location, as a manufacturing center as well as being important to the East Asian economy, providing a favorable investment environment thanks to the stability of the government, a clearly defined economic vision, fair policy implementation, few investment barriers and attractive incentive mechanisms.

Over the years, Vietnam has always strived to improve the business environment, typically by issuing Resolution 02/NQ-CP on improving the business environment and enhancing national competitiveness by 2024, as well as actively participating in global trade agreements, thereby strengthening Vietnam's position as a favorite destination for international trade.

In a recent discussion in Belgium, representatives of businesses belonging to the European Chamber of Commerce in Vietnam (EuroCham) all believed in the stable development of the Vietnamese economy.

EuroCham Chairman Dominik Meichle affirmed that “Vietnam is bringing many opportunities to our business community.” The Business Confidence Index (BCI) in the first and second quarters, announced by EuroCham, was 52.8 points - the highest since 2022 and 51.3 points, respectively, showing that European businesses are very optimistic about Vietnam's potential.

Meanwhile, President and CEO of the US-ASEAN Business Council (USABC), former US Ambassador to Vietnam Ted Osius, said that the number of US businesses coming to Vietnam in 2024 could break records because this is a stable, open country, always ready to take steps to facilitate business investment and ready to address challenges.

Thong Nhat Bicycle Company produces bicycles for domestic consumption and export. (Photo: Tran Viet/VNA)

In addition, there are a number of other important factors that contributed to creating a "boost" for Vietnam's economic growth in the first 6 months of this year, including a high level of market access liberalization, which is assessed by the World Trade Organization (WTO) as being on par with Singapore - the most developed country in Southeast Asia, along with a quality workforce, reasonable costs, especially leading the world in digital economic growth rate in the period 2022-2026 (according to a survey by the Financial Times and Omdia in 2022 for 39 countries).

The economic achievements in the first half of this year have opened up expectations for better growth in the final months of the year. Economic experts both at home and abroad believe that Vietnam's economy will "continue to recover" in the second half of 2024.

The IMF forecasts that because Vietnam's economy has recovered since late 2023 and accelerated strongly in the first half of 2024, GDP growth in 2024 is likely to slow down somewhat, but will still be above 6% overall, while inflation may remain close to the target of 4.5%. Major banks such as the Asian Development Bank (ADB), Standard Chartered, and HSBC have also made similar forecasts.

However, experts also pointed out that to achieve such growth, Vietnam will have to make more efforts due to many lurking risks, including global geopolitical fluctuations, the devaluation of the Vietnamese currency, and rising public sector wages that could lead to increased inflation. Therefore, more than ever, Vietnam needs to balance economic recovery with risk management, closely monitor the situation, and be ready to act in case of high inflation.

In addition, Vietnam needs a good capital market, which requires good institutions and transparent economic governance to operate effectively. The results of the EuroCham BCI survey, which decreased in the second quarter, show that foreign enterprises are still facing legal barriers in Vietnam, so Vietnam needs to identify a number of important reforms, including simplifying administrative management, strengthening the legal framework, improving infrastructure, etc.

With strong economic momentum over the past time, especially in the first half of 2024, public opinion is expecting steady growth in the "S-shaped country."

In its assessment released last June, the US credit rating agency S&P Global Ratings believes that when global demand recovers and Vietnam gradually resolves its difficulties, the economy of this Southeast Asian country will accelerate./.

Ngoc Ha - (Vietnam News Agency/Vietnam+)

Source: https://www.vietnamplus.vn/kinh-te-viet-nam-dang-tren-da-hoi-phuc-nhanh-chong-trong-6-thang-dau-nam-post965419.vnp