Government leaders emphasized the spirit of "turning the tide" in their leadership and management, helping the economy overcome headwinds and remain among the highest-growth economies in the region and the world.
On January 5th, the Government held a nationwide online conference to summarize the work of 2023 and implement tasks for 2024.
Prime Minister Pham Minh Chinh stated that, in the context of the unpredictable global and regional developments of 2023, Vietnam faced a "double impact" due to unfavorable external factors and internal limitations and shortcomings. However, thanks to the government's spirit of "turning the tide and transforming the situation," the economy has "weathered the headwinds."
Last year, economic growth was higher in each subsequent quarter than the previous one. GDP in 2023 increased by 5.05%. Based on this data, Deputy Prime Minister Le Minh Khai stated that Vietnam is among the high-growth countries in the region and the world, raising the size of the economy to $430 billion, with the average consumer price index increasing by 3.25% (lower than the target of 4.5%).
Interest rates decreased by approximately 2% compared to the end of 2022. Agriculture was a bright spot and a solid pillar, growing by 3.83% last year, the highest in 10 years. Budget revenue exceeded the forecast by approximately 8.12%, reaching over 1.75 trillion VND, while tax and land lease fee exemptions, reductions, and extensions totaled 194,000 billion VND. Total import and export turnover reached 683 billion USD, with a trade surplus of 28 billion USD, the highest ever and contributing to increased national reserves.
Disbursement of public investment capital is expected to reach nearly 676,000 billion VND, equivalent to 95% of the plan assigned by the Prime Minister. This figure is about 146,000 billion VND higher than in 2022, and is the highest disbursement level ever recorded.
Vietnam remains an attractive destination for foreign investors, attracting over 32% more foreign capital, reaching nearly $37 billion.
Prime Minister Pham Minh Chinh speaks at the Government-Local Authorities Conference, January 5th. Photo: VGP
However, the economy still reveals some limitations and shortcomings, such as economic growth being among the highest in the region and the world but failing to reach the set target (6.5%).
The reasons cited by government leaders include a decline in aggregate demand, disruptions to supply chains and production, and tight monetary policies in countries that are major and traditional markets for Vietnam. Electricity production and supply basically meet demand; however, there were still localized power shortages in May and June 2023, mainly due to reactive and disorganized dispatching, transmission, and distribution.
Production and business activities are facing many difficulties, and a widespread shortage of orders is occurring due to declining domestic and international demand.
Access to credit remains difficult. By the end of 2023, credit increased by 13.71% compared to 2022 (the target was 14-15%), equivalent to VND 13.5 million billion. The balance of deposits from the public reached over VND 14.5 million billion, an increase of 13.16%. However, non-performing loans are trending upwards, with the on-balance sheet loan ratio at 3.36%, higher than the control target (below 3% by the end of 2025).
According to government leaders, dealing with weak credit institutions and remaining stalled projects is difficult due to the need to implement many processes and procedures, including accurately assessing the value of assets that have been pending for many years.
The real estate market has improved, but remains sluggish mainly due to segment inadequacies and legal obstacles. The corporate bond market is being de-escalated but still carries potential risks.
Prime Minister Pham Minh Chinh raised the issue that while some indicators are positive, ministries, sectors, and localities have not yet taken advantage of these opportunities for socio-economic development. For example, the budget deficit is well controlled, and public and foreign debt are at warning levels, but what needs to be done to fully utilize the fiscal policy space for socio-economic development?
Therefore, he requested an analysis of the results in public investment, attracting and disbursing FDI capital, budget revenue, industrial production, agriculture, etc., in order to address weaknesses in governance in 2024.
In his report on socio-economic development, Deputy Prime Minister Le Minh Khai stated that this year, opportunities, advantages, and challenges are intertwined, but difficulties outweigh advantages. Despite a stable macroeconomic foundation, the Vietnamese economy still faces many challenges.
Deputy Prime Minister Le Minh Khai speaks at the Government-Local Authorities Conference, January 5th. Photo: VGP
2024 is considered a breakthrough year in the five-year economic development plan. Concluding the conference, Prime Minister Pham Minh Chinh stated that the government will prioritize boosting economic growth (6-6.5%), maintaining macroeconomic stability, and controlling inflation at 4-4.5%. Exports are projected to increase by at least 6% compared to 2023, reaching nearly $724 billion.
Experts also predict that inflationary pressure this year will not be significant, with scenarios revolving around 3.2-3.9% - lower than the National Assembly's target (4.5%).
In addition to traditional growth drivers (investment, exports, consumption), the Government will promote new drivers of science and technology, innovation, digital transformation, green transformation, and emerging fields such as semiconductor chips and hydrogen. Simultaneously, it will accelerate the disbursement of public investment capital and the construction progress of key transportation projects, especially Long Thanh Airport.
The Prime Minister requested ministries, sectors, and localities to remove obstacles and promote production and business to increase the economy's capacity to absorb capital. "We must both address long-standing issues and bottlenecks in policy and implementation, and respond quickly to new, unforeseen developments," he stated.
He also called for continued streamlining of administrative procedures with the goal of reducing compliance costs by 10%. The budget must increase revenue and reduce expenditure. "We are determined to save 5% on expenditure and increase state budget revenue in 2024 by at least 5%," the Prime Minister concluded.
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