Global Economic Growth in 2024: A Mixed Picture
In 2024, the world situation continues to evolve in a complex and unpredictable manner with many risky and uncertain factors. Military conflicts continue to escalate, strategic competition between major countries becomes increasingly fierce, many countries strengthen trade protection policies, public debt and budget deficits increase, some major economies decline, and global supply chains are locally broken, affecting world peace, stability, and economic growth. However, the world economy is gradually stabilizing as global trade in goods improves again, inflationary pressures gradually decrease, financial market conditions continue to loosen, and the labor market recovers positively. By the end of December 2024, most international organizations maintained or increased global economic growth by 0.1 to 0.3 percentage points compared to previous forecasts, reaching 2.7% to 3.2%, equivalent to the growth rate in 2023. The International Monetary Fund (IMF) (1) and the Organization for Economic Cooperation and Development (OECD) (2) both forecast world economic growth in 2024 at 3.2%, unchanged from the forecast in July and September 2024. Fitch Ratings (FR) forecasts 2.8%, up 0.1 percentage points (3) . The United Nations (UN) estimates that world economic growth will reach 2.7%, an increase of 0.3 percentage points compared to the forecast in January 2024 (4) .
The US economy has many positive signs.
US economic indicators continue to be positive in 2024. Retail sales in December 2024 increased by 0.7% compared to the previous month, higher than the market expectation of 0.5%. Compared to the same period last year, US retail sales in November increased by 3.8%. Factors supporting strong domestic consumption include a solid job market, with record low layoffs and strong wage growth. This creates a solid foundation for the economy to have an optimistic outlook in the coming 2025. In terms of inflation, the consumer price index (CPI) increased by 2.7% in December compared to the same period last year. This figure is up from 2.6% in October and 2.5% in September.
China's economic recovery is slow
China continues to struggle with years of economic problems including a property crisis, weak domestic consumption and local government debt defaults. China's retail sales rose just 3% year-on-year in December, much slower than the 4.8% growth in October. This was the slowest retail sales growth since August. Chinese government bond yields have fallen significantly, from 2.56% for 10-year maturities at the start of 2024 to just 1.74% in November 2024. The low government bond yields are seen as an indicator of the market's less optimistic expectations for the economy.
Southeast Asia's growth shows signs of recovery but uneven across countries
According to the Asian Development Bank (ADB), growth in 2024 of countries in the region is as follows: Singapore 3.5%, up 0.9 percentage points compared to the forecast in September 2024; Malaysia 5%, up 0.5 percentage points; Thailand 2.6%, up 0.3 percentage points; growth of Indonesia and the Philippines remains unchanged at 5% and 6% respectively (5) .
Vietnam's Economy 2024: On the Path to Strong Recovery
Politburo member, Prime Minister Pham Minh Chinh and Mr. Jensen Huang, founder and CEO of NVIDIA Corporation (USA) witnessed the signing ceremony of the cooperation agreement between the Vietnamese Government and NVIDIA Corporation on research and development of artificial intelligence_Photo: VNA
Economic growth has improved, exceeding the set target.
According to the General Statistics Office, the gross domestic product (GDP) in 2024 is estimated to increase by 7.09% over the previous year. In the total added value increase of the whole economy, the agriculture, forestry and fishery sector increased by 3.27%, contributing 5.37%; the industry and construction sector increased by 8.24%, contributing 45.17%; the service sector increased by 7.38%, contributing 49.46%. Accordingly, the GDP scale at current prices in 2024 is estimated at 11,511.9 trillion VND, equivalent to 476.3 billion USD; GDP per capita in 2024 at current prices is estimated at 114 million VND/person, equivalent to 4,700 USD, an increase of 377 USD compared to 2023. Labor productivity of the entire economy in 2024 at current prices is estimated at 221.9 million VND/worker (equivalent to 9,182 USD/worker, an increase of 726 USD compared to 2023); at comparable prices, labor productivity increased by 5.88% due to improved qualifications of workers (the rate of trained workers with degrees and certificates in 2024 is estimated at 28.3%, 1.1 percentage points higher than in 2023) (6) . Accordingly, there are 3 main drivers leading to GDP growth in 2024, as follows:
Firstly , the industrial production index (IIP) in 2024 is estimated to increase by 8.4% over the previous year (in 2023 it increased by 1.3%). Of which, the processing and manufacturing industry increased by 9.6% (in 2023 it increased by 1.5%), contributing 8.4 percentage points to the GDP growth in 2024.
Second , the export turnover of goods in December 2024 reached 35.53 billion USD, up 5.3% over the previous month and up 12.8% over the same period last year. In the fourth quarter of 2024, the export turnover reached 105.9 billion USD, up 11.5% over the same period last year and down 2.5% over the third quarter of 2024. In the whole year of 2024, the export turnover of goods reached 405.53 billion USD, up 14.3% over the previous year. Notably, in terms of the import and export market of goods in 2024, the US became Vietnam's largest export market with a turnover of 119.6 billion USD. China is Vietnam's largest import market with a turnover of 144.3 billion USD.
Third , FDI attraction is a bright spot in the region. Total foreign investment capital registered in Vietnam as of December 31, 2024, including newly registered capital, adjusted registered capital, and capital contribution and share purchase value of foreign investors, reached 38.23 billion USD, down 3.0% over the same period last year. Foreign direct investment realized in Vietnam in 2024 is estimated at 25.35 billion USD, up 9.4% over 2024.
Business sector activities show signs of "warming up" as the Government drastically reforms institutions and the business environment.
According to the Department of Business Registration - Ministry of Planning and Investment, by the end of 2024, the whole country had more than 233.4 thousand newly registered enterprises and returned to operation, an increase of 7.1% over the previous year; on average, nearly 19.5 thousand newly established enterprises and returned to operation each month. The number of bankrupt enterprises withdrawing from the market was 197.9 thousand enterprises, an increase of 14.7%; on average, nearly 16.5 thousand enterprises withdrew from the market each month. However, according to the report of the General Statistics Office, assessing the production and business activities of enterprises in the fourth quarter of 2024 compared to the third quarter of 2024, 77.3% of enterprises assessed that production and business activities in the fourth quarter of 2024 were better and remained stable compared to the third quarter of 2024; 22.7% of enterprises assessed that production and business activities were more difficult. Compared to the third quarter of 2024, the rate of enterprises assessing the situation as more favorable than the previous quarter increased by 5.1%; stable increased by 0.4% and more difficult decreased by 5.5%.
Flexible monetary policy management, maintaining macroeconomic stability and curbing inflation
In 2024, the State Bank will operate monetary policy proactively, flexibly, promptly and effectively, contributing to supporting economic growth. The insurance market will gradually recover and develop according to the set orientation and goals. The stock market will operate stably, with the stock market capitalization increasing by 20.6% compared to the end of 2023, specifically:
- As of December 25, 2024, total means of payment increased by 9.42% compared to the end of 2023 (increased by 10.34% over the same period last year); capital mobilization of credit institutions increased by 9.06% (increased by 11.19% over the same period last year); credit growth of the economy reached 13.82% (increased by 11.48% over the same period last year).
- The central exchange rate in 2024 will be basically stable thanks to the State Bank's appropriate exchange rate management, flexible foreign currency intervention, limiting the pressure of abnormal fluctuations on the market exchange rate, contributing to stabilizing and meeting legitimate foreign currency needs. As of December 31, 2024, the central exchange rate VND/USD was at 24,355 VND, an increase of 1.97% compared to the end of 2023.
- The consumer price index (CPI) for the whole year of 2024 increased by 3.63% over the previous year, achieving the target set by the National Assembly. The average gold price index for the whole year of 2024 increased by 28.64%. The average US dollar price index for the whole year of 2024 increased by 4.91%.
Development investment has many bright spots
Total social investment capital in 2024 at current prices is estimated at VND 3,692.1 trillion, up 7.5% over 2023, higher than the 6.6% increase of the previous year, reflecting the positive recovery of production and business activities. Foreign direct investment capital realized in Vietnam in 2024 is estimated at USD 25.35 billion, up 9.4% over the previous year, reaching the highest level ever.
State budget revenue exceeds target
According to the Ministry of Finance, by the end of 2024, the total state budget revenue in 2024 is estimated to reach VND 2,037.5 trillion, equal to 119.8% of the annual estimate and an increase of 16.2% compared to 2024. The total accumulated budget expenditure in 2024 is estimated to reach VND 1,830.8 trillion, equal to 86.4% of the annual estimate and an increase of 5.7% compared to the previous year.
Steel production shows signs of recovery in 2024, growth expected in 2025 to serve large public investment projects_Photo: VNA
Challenges of Vietnam's economy
Firstly , although domestic consumption has increased, it has increased slightly, causing weak aggregate demand. For the whole year of 2024, the total retail sales of goods and consumer service revenue at current prices is estimated at VND 6,391.0 trillion, up 9.0% over the previous year (in 2023 it increased by 9.4%), if excluding price factors, it increased by 5.9% (in 2023 it increased by 6.8%). It is worth noting that retail sales of goods have the lowest growth rate, reaching 8.1% over the same period last year. And it is forecasted that by the end of the year, domestic consumers will continue to reduce spending to increase savings, further lowering demand for goods and services.
Second , the USD-VND exchange rate fluctuates unpredictably. Vietnam’s economy is strongly influenced by US consumer demand, with export production recovering positively, but is vulnerable to a decline in US household spending and changes in trade policies aimed at preventing imports of Chinese goods through intermediate economies. Vietnam has the highest export growth rate to the US market, led by textiles, footwear, wooden furniture and machinery. With newly elected President Donald Trump taking office, trade-related policies and tariff barriers may pose challenges to trade growth in the near future.
Third , mobilizing investment capital, especially to increase public investment to promote economic growth according to the target of about 7 - 7.5% in 2025, will face difficulties due to limited balance of revenue and expenditure, leading to low investment balance. This leads to public sector savings, from the balance of budget revenue compared to budget expenditure, being almost very low, causing a shortage of resources for development investment.
Fourth , tariffs and non-tariff measures are increasingly being applied in international trade. This makes it more difficult for Vietnam to export to major world markets. In 2024, there were 26 trade defense investigations from abroad, the highest increase in the period 2020 - 2024, of which the US accounted for nearly 50% of the total number of cases.
Fifth , income growth is slower than housing prices, posing a major challenge. In 2024, real estate prices will continue to increase sharply, leading to a widening gap between real estate prices and average incomes. Rising real estate prices will also lead to rising rents, making it more difficult for households to find a suitable apartment for long-term rent instead of buying immediately. And when housing needs are not met, social stability will be affected and pose potential risks to other social issues.
Vietnam economic growth forecast in 2025
Positive results in economic growth in 2024, creating new momentum and spirit to strive for breakthrough growth in 2025, preparing for the high growth period of 2026 - 2030 and realizing our Party's vision of a new era of national development. At the 13th Party Central Committee meeting from January 23 - 24, 2025, the Central Committee agreed to strive for a growth target of 8% or more in 2025 and continuously achieve double-digit growth in the 2026 - 2030 period. GDP in 2025 will reach 8% or more based on the following foundations: 1- The Government and ministries and branches are urgently and resolutely perfecting institutions and policies to remove bottlenecks and barriers to growth: Investment Law, Planning Law, Securities Law... This contributes to renewing and promoting traditional growth drivers, such as investment, consumption, export..., while contributing to boosting public investment, when there is still a lot of room, it is expected that in 2025, the Government will allocate 800,000 billion VND for public investment, focusing on key infrastructure projects, such as expressways, Long Thanh airport, seaport system and North-South high-speed railway. This will create more room for increasing government debt and promoting public investment spending and domestic consumption. 2- The Government's determination to focus on removing difficulties and obstacles with 154 renewable energy projects to put them into use is necessary. This will save a lot of resources, increase green energy sources to serve production and business, especially large-scale FDI projects. 3- Resolution No. 57-NQ/TW, dated December 22, 2024, of the Politburo, "On breakthroughs in science, technology, innovation and national digital transformation" will remove bottlenecks in science - technology, innovation and breakthrough solutions to increase investment attraction in new industries and fields, high technology, such as semiconductor chips, artificial intelligence, cloud computing so that Vietnam can strongly transform to a green economy and digital economy. 4- Along with that, the Government's determination to put into testing new and modern development models, creating breakthroughs in development, construction and operation of international and regional financial centers in Ho Chi Minh City and Da Nang will be a channel to mobilize large capital sources to invest in green transformation projects, circular economy; High technology in the fields of: electronics, semiconductors, artificial intelligence, hydrogen; financial technology development; modern infrastructure, such as the North-South high-speed railway, urban railway...
Exports continue to be a bright spot in Vietnam's economy (In photo: Tractors carrying import and export goods operating at Gemalink international port)_ Photo: VNA
Some recommendations and solutions
Firstly , the Government needs to resolutely remove all institutional barriers, turn "bottlenecks of bottlenecks" into "breakthroughs of breakthroughs" for development, unblock and liberate all resources of the economy; clearly demonstrated in the strong decentralization process, creating initiative, flexibility, promoting the effectiveness of public investment resources and decentralization according to the motto "locality decides, locality does, locality takes responsibility". In particular, the urgent promulgation of documents implementing 4 laws: Law on Planning; Law on Investment (amended), Law on Investment under the form of public-private partnership, Law on Bidding (amended) plays an important role. Quickly remove obstacles, inadequacies, conflicts and overlaps so that key public investment projects of the national lifeline can be accelerated.
Second , the important role of creating special investment procedures and "green channels" to shorten procedures for innovation, semiconductor, and high-tech projects in industrial parks, so that projects can start construction soon, put into operation, and create conditions for Vietnam to continue to be an attractive destination for global FDI capital flows, which are declining and increasingly fierce competition between countries. In particular, the Government and the world's leading technology group (NVIDIA) have signed an agreement to establish a Research and Development Center and an Artificial Intelligence (AI) Data Center. This is a landmark event, expected to contribute to making our country a leading AI research and development center in Asia.
Third , urgently streamline the apparatus, build and operate an effective and efficient national governance state; implement practical and effective management methods of the private sector in public sector management; improve efficiency and control work results; promote decentralization, decentralization, eliminate power concentration, create a healthy competitive environment in the state apparatus; promote the application of flexible public-private management models.
Fourth , the Government needs to proactively develop GDP growth scenarios at different levels for 2025 and the 2026-2030 period. The growth scenario needs to specify how much each industry and sector must increase and clearly identify the potential, driving force, and specific resources to prepare and exploit resources for development. Along with that, it is necessary to proactively and flexibly implement fiscal and monetary policies with focus, key points, and coordinate synchronously, harmoniously, and closely with other policies; credit and interest rate policies must be appropriate and in harmony with the needs, ensuring the interests of related entities in the economy.
Fifth , boost aggregate demand based on increased consumption, focusing on developing the domestic market. Effectively implement trade promotion programs, promote the distribution of goods through digital platforms and e-commerce to expand domestic consumption. Encourage Vietnamese people to prioritize using Vietnamese goods. Focus on investing in modernizing the distribution system in rural and mountainous areas to increase the consumption of Vietnamese goods, promote the implementation of activities to stimulate domestic consumption in localities with unique and advantageous products. Improve the quality of services, especially food, accommodation, and domestic tourism services; increase the attraction of international tourists.
Sixth , promote and create breakthroughs for new growth drivers, boost the development of green economy, circular economy, data economy, e-commerce, and new business models. Support businesses in accessing and applying artificial intelligence, digital transformation, green transformation, circulation, low carbon emissions, resource saving, sustainable development (ESG) ...; promote the export of green, environmentally friendly products./.
--------------------------
(1) IMF: World Economic Outlook - Pivot, Growing Threats, accessed December 27, 2024, https://www.imf.org/-/media/Files/Publications/WEO/2024/October/English/text.ashx
(2) OECD: OECD Economic Outlook Report December 2024, accessed December 27, 2024, https://www.oecd.org/en/publications/oecd-economic-outlook-volume-2024-issue-2_d8814e8b-en.html
(3) FR: Global Economic Outlook December 2024, accessed December 27, 2025, https://www.fitchratings.com/research/sovereigns/global-economic-outlook-december-2024-05-12-2024
(4) UN: World Economic Situation and Prospects, accessed December 31, 2024, https://www.un.org/development/desa/dpad/wp-content/uploads/sites/45/WESP-2024_September_2024_WEB.pdf
(5) ADB: Asian Development Outlook January 2024, accessed December 27, 2024, https://www.adb.org/publications/asian-development-outlook-december-2024
(6) General Statistics Office (2025): Report on socio-economic situation in the fourth quarter and year 2024, Hanoi
Source: https://tapchicongsan.org.vn/web/guest/kinh-te/-/2018/1047302/kinh-te-viet-nam-nam-2024-va-trien-vong-nam-2025.aspx
Comment (0)