Vietnam's GDP growth for the third quarter and the whole of 2024 is projected to remain at 6.5%, even though the economy has been somewhat affected by Typhoon No. 3.
The global and domestic macroeconomic environment is showing many positive factors that will create momentum for achieving this year's growth target. However, Vietnam's economy has recently suffered significant damage from recent events. Typhoon No. 3 Despite the challenges, the business community and analysts remain optimistic about the overall picture, with many positive aspects. More importantly, the decisive involvement of the Government , relevant ministries, and the efforts of businesses are crucial factors in ensuring the achievement of the set goals.
Export turnover Maintaining high growth momentum, a positive Manufacturing Purchasing Managers' Index (PMI), focused public investment disbursement, and accelerated implementation of post-typhoon recovery support programs are the driving forces behind sustained growth.
Analysts from VNDirect Securities Joint Stock Company, in their updated macroeconomic analysis report titled "Boosting the economy after the storm is a top priority," also offered a very positive perspective. Accordingly, despite suffering damage from the storm, the experts maintained their forecast. GDP growth The target for Q3/2024 is 6.4-6.8%, and for the whole year 2024 is 6.5%.
These forecasts are primarily based on the growth of the first eight months of the year. Specifically, import and export activities exceeded forecasts, with export turnover increasing by 15.9% and import turnover increasing by 18.1% in the first eight months of 2024, a very positive result. In addition, the Vietnam manufacturing PMI reached 52.4 points, highlighted by three key points: production and new orders continued to increase significantly; inflationary pressure eased; and employment decreased for the first time in the last three months – all positive indicators for ensuring this year's growth target is met.
Based on developments in production and exports, Mr. Do Quang Hinh - Head of Macroeconomics and Market Strategy at VNDirect - commented: "We maintain a positive assessment of export prospects in the remaining months of this year."
Therefore, we are raising our forecast for export growth this year to +15.2% year-on-year, up from our previous forecast of 10-12% year-on-year; and raising our forecast for import growth this year to +17.2% year-on-year, up from our previous forecast of 13-15%. " The better-than-expected export and import performance is expected to partially offset the growth slowdown caused by the typhoon to the economy." - Mr. Hinh emphasized.
Along with positive signals from production and import/export, the decisive involvement of the Government and ministries is also a crucial factor in ensuring that this year's growth target is met as planned. Specifically, the Government's support program for people and businesses affected by Typhoon No. 3 and for economic recovery is being widely implemented, focusing on restoring essential infrastructure such as power grids, roads, schools, and clinics, while also assisting people in repairing and rebuilding houses damaged by Typhoon No. 3. The Government has assigned State Bank of Vietnam Planning and implementing policies such as debt restructuring, deferral, and freezing; credit guarantee policies; and zero-interest rate packages; the Ministry of Finance is researching reductions, extensions, and deferrals of various taxes, fees, and charges; and the Ministry of Industry and Trade is ensuring the supply of raw materials for production and business.
In addition, to boost growth, the Government will further accelerate the disbursement of public investment and national target programs.
Speaking with a reporter from the Industry and Trade Newspaper, economist Dr. Tran Dinh Thien commented: Increased disbursement of public investment in infrastructure will have a profound ripple effect on the economy, impacting small and medium-sized enterprises. This will create momentum to stimulate consumption and production, contributing to economic growth.
Another positive sign for the economy is the gradually easing global credit environment: Major central banks have been accelerating their interest rate cuts; the US Federal Reserve (Fed) began cutting policy interest rates from its September meeting and will cut a total of 75-100 basis points from now until the end of the year. This has had a positive impact on the domestic money market. In fact, credit demand continues to increase and credit has recovered significantly from mid-August to the present, causing deposit interest rates to maintain a moderate upward trend.
According to Mr. Do Quang Hinh, the State Bank of Vietnam has adjusted its monetary policy to support system liquidity in the context of a stable foreign exchange market, starting from the second half of August. Specifically, the temporary suspension of treasury bill issuance reflects a shift in priority towards supporting liquidity and aiming to cool down interbank interest rates. At the same time, the State Bank of Vietnam continues to cut interest rates on treasury bills and the interbank market (OMO). As a result, “Interbank interest rates have cooled down significantly, with overnight rates falling below 4.0%, indicating that the State Bank of Vietnam's intervention measures have been effective. Simultaneously, the net balance through OMO operations has shifted to a net injection, marking a reversal from the net withdrawal trend seen since the beginning of June 2024.” - Mr. Hinh cited an example.
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