Determined to achieve 7% growth despite more challenges due to super storm

(Chinhphu.vn) - High growth scenarios, likely to reach or even exceed the upper threshold of the 2024 GDP target of 6-6.5%, are predicted by domestic and foreign economic organizations. The losses and damages caused by super typhoon Yagi are a parameter that needs to be taken into account, but Prime Minister Pham Minh Chinh still requires striving to achieve a full-year growth rate of about 7%.

Prime Minister Pham Minh Chinh inspects the damage and directs the implementation of urgent measures to overcome the consequences of storm No. 3 in Quang Ninh - Photo: VGP/Nhat Bac

The impressive growth rate of 6.93% of the Vietnamese economy in the second quarter of 2024, higher than the 5.66% in the first quarter of 2024, creates a basis for us to believe in a new miracle of the Vietnamese economy in 2024. This is also the common feeling of economic organizations when looking at our country's economy. In early July 2024, at the workshop "Vietnam's economy in the first 6 months of the year and prospects for the whole year 2024: New driving force for quality growth", the Central Institute for Economic Management (CIEM) released 2 macroeconomic forecasts for 2024. Accordingly, in scenario 1, GDP growth is forecast to reach 6.55%, exports for the whole year are expected to increase by 9.54%, trade surplus at 5.7 billion USD; In scenario 2, GDP growth is forecast to reach 6.95%, exports for the whole year will increase by 11.64%, and the trade surplus will be at 7.3 billion USD. Meanwhile, in mid-July 2024, the ASEAN+3 Macroeconomic Research Office adjusted Vietnam's economic growth forecast for 2024 to 6.3%, the highest in ASEAN. From the World Bank's perspective, in a review report published at the end of August 2024, it is forecasted that Vietnam's economy could grow by 6.1% in 2024 and 6.5% in 2025 and 2026. The spirit of determination to achieve high growth in the third and fourth quarters of 2024, striving to achieve the above threshold in the GDP growth target for 2024 set by the National Assembly for the whole year has been demonstrated throughout the conferences and directions on economy and society of Prime Minister Pham Minh Chinh. The economic results of the second quarter of 2024 and the achievements recorded in the first two months of the third quarter of 2024 demonstrate that the spirit has turned into action, and the directives have been effectively realized. In July and August 2024, industrial production continued to maintain a positive trend. The industrial production index in July and August increased by 11.2% and 9.5%, respectively. After 8 months of 2024, this index increased by 8.6%, of which the processing and manufacturing industry increased by 9.7%. Exports are still a bright spot for the entire economy, with the total preliminary import and export turnover of goods in the first 8 months reaching 511.11 billion USD, up 16.7% over the same period last year, of which exports increased by 15.8%, imports increased by 17.7%, and the trade surplus is estimated at 19.07 billion USD. Notably, the recovery trend of enterprises continued to be maintained in July and August. According to the General Statistics Office, in the first 8 months of 2024, 168,100 enterprises entered the market, higher than the number of enterprises withdrawing from the market by 135,300 enterprises. If the Vietnamese economy achieves a growth rate of 6.5-7% in the third quarter of 2024, according to an economic expert, to achieve a GDP growth rate of 6.5% for the whole year, the growth in the fourth quarter of 2024 needs to reach about 6.2%. Before the time of Typhoon Yagi, the above task was relatively feasible. The Purchasing Managers' Index (PMI) in July reached 54.7 points, and in August reached 52.4 points, proving that the manufacturing industry is still developing well. According to the usual rule, export orders will continue to be abundant in the fourth quarter of each year, to serve the festive occasions at the end of 2024 and the beginning of 2025. Therefore, it is likely that exports will continue to be positive with the PMI index from September to the end of the year being higher than the average. Regarding public investment, although according to the Ministry of Finance , from the beginning of the year to August 31, 2024, public investment disbursement reached VND 274,501 billion, reaching 37.01% of the plan and reaching 40.49% of the plan assigned by the Prime Minister, but normally, the speed of public investment disbursement will increase rapidly in the last months of the year. Also with close and drastic direction from the Government, public investment is certainly one of the important growth drivers of the Vietnamese economy from now until the end of 2024. However, super typhoon Yagi has caused terrible destruction. The Ministry of Planning and Investment estimates that Typhoon Yagi caused VND40 trillion in damage to northern localities, making this year's GDP 0.15% lower than the previous scenario.

Regarding the growth momentum in the coming months, Dr. Nguyen Tri Hieu agreed that public investment is one of the key factors supporting economic growth - Photo: VGP/Hoang Hanh

Great determination of the Government

According to the Ministry of Planning and Investment , storm No. 3 and its circulation after the storm affected 26 northern provinces and cities and Thanh Hoa. These localities account for over 41% of GDP and 40% of the country's population. Hai Phong - one of the two localities "swept away" by storm Yagi - suffered a loss of VND10,820 billion, equal to 1/10 of the city's total budget revenue in 2023. Quang Ninh - where the storm passed through - suffered a loss of about VND23,770 billion. "The growth rate in the last 6 months of the year of the whole country and many localities is forecast to slow down," said Minister of Planning and Investment Nguyen Chi Dung, adding that GDP growth in the third quarter could decrease by 0.35%, and in the fourth quarter by 0.22% compared to the scenario without storm Yagi. For the whole year, GDP could decrease by 0.15% compared to the growth scenario proposed at the end of the second quarter (6.8-7%). Of which, the agriculture, forestry and fishery sector decreased by 0.33%, industry and construction decreased by 0.05% and services by 0.22%. This year's GRDP of many localities that suffered heavy damage due to storms, such as Hai Phong, Quang Ninh, Thai Nguyen, Lao Cai... may decrease by more than 0.5%. However, at the conference on September 15, Prime Minister Pham Minh Chinh requested to urgently restore production and business activities, control inflation well and strive for GDP growth of about 7% for the whole year. At the same time, he assigned the Ministry of Planning and Investment and other agencies to develop and implement programs to overcome the consequences of storms and floods, restore production and business, and promote growth. The Prime Minister also pointed out specific groups of tasks and solutions, first of all, promoting disbursement of public investment, national target programs, restructuring production and business in accordance with local conditions; continuing to diversify markets, products, supply chains... According to Dr. Nguyen Tri Hieu, a financial economist, said that this shows the Government's great determination, because it is clear that the parameters of storm Yagi need to be taken into account on the path to achieving the GDP growth target in 2024. The recent storm has caused great damage to the northern provinces, affecting road and bridge infrastructure, production and business establishments, seriously affecting rice and crop areas... To help the northern provinces recover, it will take a lot of budget and resources. "According to the World Bank's forecast, climate change and natural disasters can cause damage of up to 13% of Vietnam's GDP by 2030. Storm Yagi will have certain negative impacts on the GDP growth rate in the third quarter of 2024 in particular and the whole year of 2024. We will need to make more efforts", Dr. Nguyen Tri Hieu expressed his opinion. Regarding the growth momentum in the coming months, Dr. Nguyen Tri Hieu agreed that public investment is one of the key factors supporting economic growth. In addition to reinvesting in infrastructure damaged by Typhoon Yagi, public investment should be directed towards important projects and works that have a widespread impact, laying the foundation for economic development in 2025 and the following years. The financial economist added that another urgent task is to support the full recovery of the private economic sector, especially small and medium-sized enterprises, through continuing to strongly reform administrative procedures, reducing costs for businesses, increasing access to credit with reasonable interest rates, etc. These are also the key tasks that the Government and the Prime Minister have been and are resolutely directing. "In September 2024, the Fed will most likely begin the process of reducing interest rates. This will have a positive impact, helping the US and world economies gradually recover, and demand for goods from Vietnam will increase. The economic outlook in 2025 may be brighter than in 2024," said Dr. Nguyen Tri Hieu.

Government.vn

Source: https://baochinhphu.vn/quyet-tam-dat-tang-truong-7-du-thach-thuc-hon-do-sieu-bao-102240917102220242.htm