Positive signals for economic growth

The year 2024 is crucial in the socio -economic development plan for the entire 2021-2025 period, requiring ministries, sectors, and localities to decisively and synchronously implement policies and solutions on taxes, fees, currency, trade, and investment to promote the rapid recovery of production and business, create jobs, and provide livelihoods for the people.

Positive signs for economic growth.

Construction work on the Bien Hoa-Vung Tau expressway project. (Photo: DUY LINH)

Continuing the recovery trend from the end of 2023, the Vietnamese economy showed signs of improvement in the first month of the new year 2024, with statistical indicators in many sectors and fields showing significant improvement.

A resilient economy overcoming difficulties.

Entering 2024, the manufacturing sector received good news as the Purchasing Managers' Index (PMI) returned to above 50 points for the first time after four consecutive months of decline. The January 2024 PMI report showed that Vietnam's manufacturing PMI reached 50.3 points, up from 48.9 points in December 2023. This index reflects an improvement in the health of the manufacturing sector as production and new orders have increased again.

Speaking at a recent seminar on Vietnam's economic outlook for 2024, Mr. Truong Van Cam, Vice President and General Secretary of the Vietnam Textile and Garment Association (VITAS), said that member businesses are starting to receive orders again, although prices have not yet improved.

In addition, lending interest rates have decreased significantly, easing the pressure of borrowing costs; the government 's business support policies, extended into 2024, are also positive factors supporting the textile and garment industry's goal of achieving $44 billion in export turnover in 2024, a 9.2% increase compared to 2023 and equivalent to the industry's highest export turnover in 2022.

The resurgence of this key export sector also reflects the overall positive atmosphere of the entire industrial production sector. According to the General Statistics Office, in January 2024, the industrial production index (IIP) increased by 18.3% year-on-year, with the manufacturing industry increasing by 19.3%, contributing 15.1 percentage points to the overall growth.

Notably, the industrial production index in January 2024 increased in 60 localities compared to the same period last year, while only 3 localities nationwide experienced a decrease. Regarding investment, total registered foreign direct investment (FDI) in January 2024 increased sharply by 40.2% year-on-year, with implemented capital reaching US$1.48 billion, a 9.6% increase. This signals that Vietnam is taking advantage of opportunities arising from its diplomatic and foreign policy achievements in 2023.

Goods exports and imports achieved growth of nearly 38% compared to the same period last year; a trade surplus of US$2.92 billion also shows signs of recovery after a long period of businesses struggling due to a lack of orders. Public investment activities in 2024 are also expected to be more vibrant thanks to the close guidance of the Government and the Prime Minister. Obstacles and difficulties in each industry, sector, and stage of public investment projects have been identified and solutions sought. As a result, in January 2024, disbursement of public investment capital reached VND 16,900 billion, equivalent to 2.58% of the plan assigned by the Prime Minister, higher than the same period last year in both relative and absolute terms.

Positive signs for economic growth.

Manufacturing ultra-precision mechanical components at Fujikin Co., Ltd. (VSIP Bac Ninh Industrial Park). (Photo: DANG KHOA)

Accelerate institutional reforms.

Despite its achievements, the Vietnamese economy is facing many difficulties and challenges: industrial production is recovering slowly, and the number of businesses leaving the market remains high. While macroeconomic stability is generally maintained, risks remain, evidenced by the difficulties in addressing weak banks and restructuring "zero-capital" banks; the real estate market and corporate bond market still have many issues that need to be resolved, etc.

According to Minister of Planning and Investment Nguyen Chi Dung, the country is facing many new opportunities, but seizing these opportunities requires strong institutional reform and innovation. Specifically, it is necessary to build new, comprehensive mechanisms and policies in many areas of state management to attract investment, financial resources, science and technology... from abroad and to leverage the internal strengths of the economy. These are major issues that need to be addressed in the short, medium, and long term, with 2024 being identified as a pivotal year. Ministries, sectors, and localities need to focus on researching and advising on the development of mechanisms and policies to attract resources from the beginning of the year.

According to Minister of Planning and Investment Nguyen Chi Dung, the country is facing many new opportunities, but seizing these opportunities requires strong innovation and institutional reform.

According to Tran Thi Hong Minh, Director of the Central Institute for Economic Research and Management (CIEM), institutions are a crucial resource, even a key, to promoting economic growth in the new development context. Vietnam has not only relied on fiscal and monetary solutions to boost economic growth, but has also created numerous new drivers from economic institutional reforms. These include promoting innovation, developing new economic models, reforming the business environment, restructuring the economy, and improving regional planning and institutional linkages.

The government has also frankly and constructively acknowledged the issues that need to be addressed, including the backlog of documents, discipline and order in public service, difficulties in absorbing capital, etc., in order to provide guidance and conduct research to resolve them. “The work of economic institutional reform has seen important changes, especially in perfecting the policy framework for the digital economy, initially realizing some specific mechanisms and policies to develop the local economy,... Thanks to this, Vietnam has relatively effectively handled the impact of developments in the world market on economic growth, macroeconomic stability and major balances; while continuing to maintain and strengthen the confidence of domestic and foreign investors,” the Director of CIEM said about the successful lessons of 2023.

To achieve high growth in 2024, Dr. Tran Thi Hong Minh suggested that the Government needs to be more decisive in reforming economic institutions to accelerate growth recovery, with the requirement to promptly concretize policy solutions for innovation linked to improving labor productivity and simplifying business procedures.

According to Nhan Dan Newspaper

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