“Promoting aggregate demand for economic growth in the new context”

Speakers attending the Workshop (Photo: National Economics University)

On April 17, in Hanoi, 300 scientists from international organizations such as the International Monetary Fund (IMF), the World Bank (WB), the Asian Development Bank (ADB)... and central agencies, universities, research institutes at home and abroad such as the Central Economic Committee, the Economic Committee of the National Assembly, the Government Office , the National Financial Supervision Committee, the State Bank, the Ministry of Finance, the Ministry of Planning and Investment, the Ministry of Industry and Trade, the Vietnam Academy of Social Sciences, research institutes, universities of economics and business administration; economic experts; representatives of enterprises; reporters attended the Workshop and the launching event of the 2023 Annual Vietnam Economic Review.

This is a large-scale annual national conference organized by the National Economics University in collaboration with the Central Economic Committee and the National Assembly 's Economic Committee on Vietnam's Economy in 2023 and prospects for 2024, and at the same time announced the National Economics University's 2023 Annual Vietnam Economic Review with the theme: "Promoting aggregate demand for economic growth in the new context"

Publication Cover (Photo: HNV)

Speaking at the opening of the workshop, Prof. Dr. Pham Hong Chuong, President of the National Economics University, emphasized that 2023 is considered one of the most difficult years for the Vietnamese economy in recent years when it has to face many risks and uncertainties from the international context such as weakening global growth, high global inflation, tight monetary policies in many countries and increasing geopolitical tensions. Vietnam's growth in 2023 is still much worse than the pre-COVID-19 period, in which the most prominent is the weakening of aggregate demand and important components of aggregate demand such as consumption and investment, along with the quality of growth not improving.

“Aggregate demand plays an important role in determining the level of economic activity and employment in the economy. A decrease in aggregate demand indicates that the economy is at risk of recession, which affects the overall growth of the economy, causing consequences such as a decline in industrial production, high unemployment, and reduced income and spending of the people. Therefore, restoring aggregate demand is an important task for Vietnam, which requires the Government and relevant ministries, departments and sectors to urgently take appropriate and timely measures to strengthen growth drivers from aggregate demand, thereby restoring aggregate demand, creating a premise for economic development in the new context” – Prof. Dr. Pham Hong Chuong said.

On this occasion, Prof. Dr. Pham Hong Chuong also emphasized that today's workshop, in addition to a general overview of the economy, will focus on discussing elements from the aggregate demand side with the goal of restoring aggregate demand and economic growth. The results of today's workshop will be an important basis for making important policy recommendations for economic growth in the new context.

Dr. Nguyen Duc Hien, Deputy Head of the Central Economic Commission, delivered the opening speech (Photo: HNV)

In his opening speech at the workshop, Dr. Nguyen Duc Hien, Deputy Head of the Central Economic Commission, said that the workshop was organized to comprehensively summarize Vietnam's economy in 2023 (achievements and shortcomings, assessment of causes, analysis of opportunities and challenges). The report also assessed the current situation of aggregate demand and its components; achievements, existing limitations and causes; assessed the contribution of aggregate demand components to economic growth. From there, it proposed directions and policy recommendations for economic management in 2024 and the following years as well as policy recommendations to promote aggregate demand, towards sustainable economic growth in the new context. The workshop received great attention from agencies, sectors and economic experts. The workshop received more than 120 submissions, and after review, 68 articles were published in the proceedings.

Summary of the 2023 Annual Vietnam Economic Review, Prof. Dr. To Trung Thanh, National Economics University said that the 2023 Annual Vietnam Economic Review of the National Economics University chose the theme "Promoting aggregate demand for economic growth in the new context" with the aim of comprehensively summarizing Vietnam's economy in 2023 (achievements and shortcomings, assessing causes, analyzing opportunities and challenges). In addition to the Introduction, the report includes a Report Summary and a Main Report. The Report Summary will summarize the entire report in a non-technical, reader-friendly writing style. The Main Report is structured into three parts. As an annual economic assessment report, Part I (Vietnam's Economy in 2023) studies an overview of Vietnam's economy in 2023. Part II (Aggregate Demand Situation and the Role of Aggregate Demand in Growth) aims to assess the aggregate demand situation and its components as well as the impact of aggregate demand components on growth. Part III (Economic Outlook in 2024 and Policy Recommendations) presents the world and Vietnam economic outlook in 2024; at the same time, based on the research results in Part I and Part II, it provides general macroeconomic policy recommendations and policies to promote aggregate demand components for economic growth in the new context.

Mr. Shantanu Chakraborty, Director of ADB Vietnam, spoke at the Workshop (Photo: HNV)

Citing international experience in aggregate demand management and lessons for Vietnam in the new context, Mr. Shantanu Chakraborty, Director of ADB Vietnam, suggested that in response to domestic challenges, Vietnam needs to increase consumption combined with fiscal policy to increase cash supply in circulation. In the region, most countries that maintain good growth momentum are those with highly developed domestic markets and very high domestic consumption. India and Indonesia are typical examples of maintaining good growth with momentum from the domestic market. The ADB Director recommended that Vietnam needs to ensure public investment is on the right track. The Government has set a target of disbursing 95% of more than 27 billion USD in public investment by 2024. Accordingly, Vietnam needs to develop sustainable infrastructure, resilient to climate change and resilient in areas such as electricity, roads and logistics to continue attracting foreign direct investment (FDI). Vietnam needs to improve the legal environment and implement necessary policy reforms to ensure rapid disbursement. The ADB Director also emphasized that the main growth drivers of Vietnam's economy in 2024 will still be services, manufacturing, FDI and consumption, continuing to maintain an excellent and extensive approach in actively and responsibly participating in promoting green growth and sustainable development.

Ms. Dorsati Madani, WB Senior Economist, speaking at the Workshop (Photo: HNV)

Analyzing the prospects, opportunities and challenges for Vietnam in 2024 in the context of declining global economic growth, Ms. Dorsati Madani, Senior Economist of the World Bank, recommended that Vietnam needs to continue to support policies to promote the recovery process, continue to make efforts to accelerate the implementation of public investment, continue to have policies to support interest rates with effective and reasonable regulations on deferral and postponement; strengthen the authority of the State Bank, improve the supervision capacity of banks and credit institutions, strengthen sanctions for violations as well as the effectiveness of supervision of the banking system and credit institutions, restructure the economy, improve institutions and loosen financial access regulations towards streamlining, flexibility and safety.

Also speaking at the Workshop, analyzing Vietnam's economy in 2023-2024, promoting private investment, an important growth driver, Dr. Can Van Luc, Chief Economist of BIDV & Member of the National Financial and Monetary Policy Advisory Council, pointed out that it is necessary to exploit new growth drivers, paying attention to digital transformation, application of science and technology, labor productivity and productivity of total factors, promoting economic institutional reform, green growth and proactive adaptation to climate change, enhancing position in the global value chain, developing supporting industries and promoting regional connectivity, promoting the role of socio-economic locomotives as well as taking advantage of opportunities from integration and economic diplomacy. According to Dr. Can Van Luc, it is also necessary to ensure a group of solutions to consolidate and renew existing growth drivers, including: successfully implementing mechanisms, policies, and resolutions issued by the National Assembly and the Government, especially Resolution 103/2023/QH15; Resolution 01 and 02/2024/NQ-CP, and promptly removing difficulties and obstacles, especially in the land, construction, real estate and corporate bond markets; promote existing growth drivers ((i) promote public investment disbursement; (ii) stimulate private investment and domestic consumption; (iii) apply policies to support people and businesses with fiscal policy as the main force and coordinated monetary policy; (iv) pay attention to promoting growth of economic locomotives, especially Hanoi, Ho Chi Minh City and Da Nang. In addition, improve the effectiveness of policy coordination (especially between fiscal policy, monetary policy and other macroeconomic policies) to achieve growth targets and stabilize the macro economy. Furthermore, it is necessary to focus on restructuring the economy (especially state-owned enterprises, weak projects, weak credit institutions, public investment...) to attract and allocate resources more effectively; improve the business system, and enhance the resilience of the economy.

Speakers discuss at the roundtable at the Workshop (Photo: HNV)

In a roundtable discussion at the Workshop, domestic and international expert speakers and managers clarified the world economic context and its impact on Vietnam's economy in 2023; assessed Vietnam's economic developments in 2023 through the main sectors of the economy (real economic sector, monetary and financial sector, budgetary and financial sector); achievements and limitations, assessed the causes of the limitations; assessed the current situation of aggregate demand and components from the aggregate demand side (investment, consumption, import-export gap), achieved results, existing limitations and causes. Assessed the contribution of these components to economic growth. The speakers also analyzed the opportunities and challenges in 2024; assessed Vietnam's economic prospects in 2024; thereby recommending policies to promote aggregate demand, contributing to sustainable growth in the new context.

Prof. Dr. Pham Hong Chuong, President of National Economics University, informed at the press conference before the Workshop (Photo: HNV)

Previously, the authors of the publication also briefly informed the press and answered some questions related to the content related to promoting aggregate demand for economic growth in the new context, pointing out an overview with many advantages and challenges of the Vietnamese economy in 2023 and prospects for 2024 in the context of complex and unpredictable developments in the region and the world. Responding to the press about the content of the private economy and interest rates, the authors also emphasized the private economic sector and the State Bank's efforts in managing exchange rates over the past time./.

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