Determined to achieve 7% growth despite increased challenges due to the super typhoon.

Báo Chính Phủ•17/09/2024

Quyết tâm đạt tăng trưởng 7% dù thách thức hơn do siêu bão- Ảnh 1. — Prime Minister Pham Minh Chinh inspects the damage and directs the implementation of urgent measures to overcome the consequences of Typhoon 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, provides a basis for us to believe in a new economic miracle for Vietnam in 2024. This is also the general sentiment of economic organizations when assessing our country's economy. In early July 2024, at the seminar "Vietnam's Economy in the First Six Months and Prospects for the Whole Year 2024: New Drivers for Quality Growth," the Central Institute for Economic Management (CIEM) presented two macroeconomic forecasts for 2024. Accordingly, in Scenario 1, GDP growth is projected to reach 6.55%, exports for the whole year are expected to increase by 9.54%, and the trade surplus is at 5.7 billion USD; In scenario 2, GDP growth is projected at 6.95%, annual exports at 11.64%, and a trade surplus of US$7.3 billion. Meanwhile, in mid-July 2024, the ASEAN+3 Macroeconomic Research Office revised its forecast for Vietnam's economic growth in 2024 to 6.3%, the highest in the ASEAN bloc. From the World Bank's perspective, in its review report published at the end of August 2024, it forecasts that Vietnam's economy could grow by 6.1% in 2024 and 6.5% in 2025 and 2026. The determination to achieve high growth in the third and fourth quarters of 2024, and to strive to reach the above-target GDP growth rate for the whole year as set by the National Assembly, has been consistently demonstrated in conferences and directives on economic and social affairs by 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 been translated into action, and the directives have been effectively implemented. 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 eight months of 2024, this index increased by 8.6%, with the processing and manufacturing sector increasing by 9.7%. Exports remain a bright spot for the entire economy, with preliminary total import and export turnover in the first eight months reaching US$511.11 billion, an increase of 16.7% compared to the same period last year, of which exports increased by 15.8%, imports increased by 17.7%, and the trade surplus is estimated at US$19.07 billion. Notably, the recovery trend of businesses continued in July and August. According to the General Statistics Office, in the first eight months of 2024, 168,100 businesses entered the market, higher than the 135,300 businesses that withdrew from the market. 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 approximately 6.2%. Before 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, demonstrating that the manufacturing sector is still developing well. According to the usual pattern, export orders will continue to be abundant in the fourth quarter of each year, serving the year-end holidays of 2024 and the beginning of 2025. Therefore, it is highly likely that exports will continue to be positive, with the PMI index from September to the end of the year 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, achieving 37.01% of the plan and 40.49% of the plan assigned by the Prime Minister, the disbursement rate of public investment usually increases rapidly in the last months of the year. With close and decisive direction from the Government, public investment will certainly be one of the important growth drivers of the Vietnamese economy from now until the end of 2024. However, Super Typhoon Yagi caused very severe damage. The Ministry of Planning and Investment estimates that Typhoon Yagi caused 40 trillion VND in damage to localities in the North, resulting in this year's GDP being 0.15% lower than previously projected.

Quyết tâm đạt tăng trưởng 7% dù thách thức hơn do siêu bão- Ảnh 2. — Regarding growth drivers in the coming months, Dr. Nguyen Tri Hieu agreed that public investment is one of the key areas supporting economic growth - Photo: VGP/Hoang Hanh

The government's strong determination

According to the Ministry of Planning and Investment , Typhoon No. 3 and its aftermath affected 26 northern provinces and cities, as well as Thanh Hoa. These localities account for over 41% of the country's GDP and 40% of its population. Hai Phong – one of the two localities devastated by Typhoon Yagi – suffered losses of 10,820 billion VND, equivalent to one-tenth of the city's total budget revenue in 2023. Quang Ninh – where the typhoon's epicenter passed through – suffered losses of approximately 23,770 billion VND. "The growth rate for the last six months of the year for 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 Typhoon Yagi. Overall for the year, GDP could decrease by 0.15% compared to the growth scenario projected at the end of the second quarter (6.8-7%). Specifically, the agriculture, forestry, and fisheries sector decreased by 0.33%, industry and construction by 0.05%, and services by 0.22%. This year, the GRDP of many localities severely affected by the storm, such as Hai Phong, Quang Ninh, Thai Nguyen, and Lao Cai, may decrease by over 0.5%. Nevertheless, at the conference on September 15th, Prime Minister Pham Minh Chinh urgently requested the restoration of production and business activities, effective inflation control, and the goal of achieving an annual GDP growth rate of approximately 7%. He also tasked the Ministry of Planning and Investment and other agencies with developing and implementing programs to mitigate the consequences of the storm and floods, restore production and business, and promote growth. The Prime Minister also outlined specific tasks and solutions, primarily focusing on accelerating the disbursement of public investment, national target programs, and restructuring production and business to suit local conditions; and continuing to diversify markets, products, and supply chains… According to Dr. According to Nguyen Tri Hieu, a financial and economic expert, this demonstrates the government's strong determination, as the impact of Typhoon Yagi clearly needs to be taken into account in the pursuit of the 2024 GDP growth target. The recent typhoon caused significant damage to northern provinces, affecting infrastructure, bridges, and businesses, and severely impacting rice and other crops. Helping these northern provinces recover will require substantial budget and resources. "According to World Bank forecasts, climate change and natural disasters could cause damage equivalent to 13% of Vietnam's GDP by 2030. Typhoon Yagi will have a certain negative impact on GDP growth in the third quarter of 2024 in particular, and the whole year of 2024 in general. We will need to make even greater efforts," Dr. Nguyen Tri Hieu stated. Regarding growth drivers in the coming months, Dr. Nguyen Tri Hieu agreed that public investment is one of the key priorities supporting economic growth. Besides reinvesting in infrastructure damaged by Typhoon Yagi, public investment should focus on important projects with a ripple effect, laying the foundation for economic development in 2025 and beyond. The financial and economic expert further noted that another urgent task is supporting the full recovery of the private sector, especially small and medium-sized enterprises, through continued strong reforms of administrative procedures, reducing costs for businesses, and enhancing access to credit at reasonable interest rates… These are also key tasks that the Government and the Prime Minister have been decisively directing. "In September 2024, the Fed will most likely begin the process of lowering interest rates. This will have a positive impact, helping the US and global economies gradually recover, and increasing demand for goods from Vietnam. The economic outlook for 2025 could be brighter than in 2024," Dr. Nguyen Tri Hieu commented.

Chinhphu.vn

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