Consumption, investment and exports continue to accelerate

VCN- By the end of the first quarter of 2021, thecountry's socio-economic situation had many clear changes. However, with many immediate difficulties, to achieve the annual growth target of 6.5% requires great determination and effort.
With a “headache” due to agricultural products consumption in pandemic region, Ministry of Industry and Trade asks the Prime Minister for help With a “headache” due to agricultural products consumption in pandemic region, Ministry of Industry and Trade asks the Prime Minister for help
Export of agricultural products accelerates from the beginning of the year Export of agricultural products accelerates from the beginning of the year
Coffee sector aims to promote domestic consumption Coffee sector aims to promote domestic consumption
5414-0922-14-mg-2277
It is necessary to innovate the growth model in the direction of technology-based innovation. Photo: H. Duu

Make effective use of FTAs

In the final session before the XIV Government was consolidated with new members of the Government, all members agreed that in the first quarter, we have fulfilled important goals, not only in the economy but also culture, society, environment, national defense, security, life and belief of the people have increased. According to the General Statistics Office, the macro economy is stable, the economic growth in the first quarter of 2021 is higher than in the first quarter of 2020, estimated to increase 4.48% (it was3.68% in the same period last year). The Prime Minister stated that the economy's key plans were consumption, investment and export continuing to increase much morethan in the same period last year.

Specifically, development investment capital increased significantly, creating a driving force for growth, in which public investment capital increased by 13%, reaching 15% of the plan; realized FDI increased by 6.5%. Total newly, adjusted FDI, capital contribution and share purchase reached more than US$10 billion, up 18.5%. Notably, Vietnamese enterprises' overseas investment increased six-fold. Newly established enterprises increase by 27.5% in registered capital. State budget revenue and expenditure achieved positive results (budget collection was as much as 23.8% of the estimate).

Along with that, import and export activities recorded strong recovery, showing that the economy has been making effective use of the signed Free Trade Agreements (FTAs). Total import-export turnover is estimated at US$152.7 billion, up 24.1%. Vietnam continues to have a trade surplus of over US$2 billion. The consumer price index (CPI) was controlled at a low level, the average CPI in the first quarter compared to the same period in 2020 increased by 0.29%. Industrial production index increased significantly, estimated at 6.5%. Trading activities and consumer services tended to recover

Commenting on Vietnam's economic development, Mr. Jacques Morisset, Chief Economist of the World Bank (WB) in Vietnam, assessed that Vietnam has shown its ability to control Covid-19 and turn the crisis into an opportunity by initially realizing dual goals. Vietnam has enhanced its presence in global trade and its domestic value-added content of exports. Digital transformation is accelerated with better connection and utilization of new information technology tools.

Increase quality of growth

Despite achieving many good results, the economic situation still has many issues of concern.

In the first quarter of 2021, GDP growth; although the level of 4.48% is higher than the growth forecasted in the report in January 2021, it is still 0.64 percentage points lower than the target set in the Resolution 01 / NQ-CP. Minister of Planning and Investment Nguyen Chi Dung said that in order to achieve the 2021 GDP growth target of 6.5%, in the second quarter, GDP should reach 7.19% (higher than 0.08 percentage points compared to Resolution 01); the third quarter needs to increase 6.78% (higher than 0.07 percentage points) and the fourth quarter needs to increase 7.16% (higher than 0.49 percentage points).

However, looking at each component macro index, it can be seen that there are still many issues, such asthe number of enterprises temporarily suspending their business for a term increased by 28.2%; enterprises completing dissolution procedures increased by 26.4%. Passenger transport is still facing many difficulties due to the Covid-19 pandemic, down 11.8%. Unemployment rate of the labor force in the working age group remains high.

In order to have development steps in the future, the Government leaders have outlined many key tasks for ministries, branches and localities. According to experts, these will be very difficulttasks, requiring the management agencies to have reasonable regulations.

Assoc.Prof.Dr. Pham The Anh, chief economist, Institute for Economic and Policy Research (VEPR), said that it is very difficult to achieve an annual growth rate of 6.5%, and growth somewhere around 5% would be more appropriate. But if we are determined to follow the above objectives, the economic policies must be harmonious.

For example, to keep interest rates stable, this is subject to a trade-off, lowering interest rates can cause inflation to soar. In addition, public investment must be disbursed in key national infrastructure projectsand to the right people because infrastructure is the foundation for future growth. If investment is spread out, the works are not essential, it will be both ineffective and cause loss of capital. Besides, we need to continue to attract FDI, because domestic resources are limited while Vietnam has many advantages to attract investment.

“Economic growth in the remaining three quarters of 2021 needs to continue to rely on the export sector, as fiscal and monetary policies are playing a lesser role than in 2020. Vietnam is also export oriented. But it should be emphasized that the economic stimulus policies must be at a moderate level with the right focus without causing waste. If not, it may create a real estate bubble and increase inflation,”Assoc. Pham The Anh said.

Under the above issues, the 2020 annual Vietnam economic assessment report, published by the National Economics University, has stated that the economic growth target is 6.5% as planned. It is very difficult for the Government in the context of the pandemic's unpredictable developments. Moreover, the room for monetary and fiscal policy is not much, so the ability to strongly expand public investment for growth will be difficult.

Supporting policies through reducing fees and charges are being implemented in a spread manner with little real impact that could waste the budget. Policies to support profit or luxury goods are inadequate and need to be redesigned.

Therefore, the report recommends that along with ongoing short-term policies to minimize the negative impact of Covid-19, Vietnam should persevere with longer-term reforms to improve the macro foundation, fundamentally transform the growth model, and increase growth quality. It is necessary to innovate the growth model in the direction of technology - innovation, taking a risk-taking mindset and encouraging entrepreneurship. World Bank experts also said that the current issue of Vietnam for more significant and effective development, so policies need to be more transparent, easier to access and promote "green growth” for sustainable development.

By HươngDịu/Bui Diep

Related News

Increasing trade defense tools in the CPTPP member countries

Increasing trade defense tools in the CPTPP member countries

VCN - The enforcement of the CPTPP over the past five years has expanded markets, attracted investment, and provided a competitive advantage for export goods. However, it has also increased the risk of Vietnamese businesses being investigated for the application of trade defense measures.
Wide door opened for export Startups to the US market

Wide door opened for export Startups to the US market

VCN - A large number of Vietnamese diaspora, especially in the US, clears the path for Vietnamese enterprises to increase exports in this market, especially Vietnamese cuisine.
Fiscal policy maintains and ensures national financial security

Fiscal policy maintains and ensures national financial security

VCN - At the 2023 Financial Forum, speaking at the session "Financial policy overcomes challenges to promote economic growth and development", Regional Resident Representative for Vietnam, Cambodia, Lao PDR, Jochen Schmittmann believes that tax incentives are only a secondary factor in attracting investment and the global minimum tax is an important initiative to avoid a "race to the bottom" on preferential tax rates among countries in attracting foreign investment.

Latest News

Cashew exporters from Ivory Coast explore cooperative opportunities with Binh Phuoc

Cashew exporters from Ivory Coast explore cooperative opportunities with Binh Phuoc

A delegation from the Cashew Exporters Association of Ivory Coast (AEC-CI) held a working session with representatives from the Cashew Association of Binh Phuoc province on December 7 on cooperation possibilities between the two sides.
Manufacturers in overdrive to cater to year-end consumption

Manufacturers in overdrive to cater to year-end consumption

The General Statistics Office (GSO) reported optimistic signals in industrial production, attributing the positive trend to businesses securing orders and gearing up for year-end consumer demand.
Vietnam introduces garment and textile products in India

Vietnam introduces garment and textile products in India

The Vietnam Trade Office in India arranged a pavilion to introduce Vietnam's textile and garment products at Intex South Asia, an international textile sourcing show opened in New Delhi on December 7.
Seafood exports avoid dependence on imported raw materials

Seafood exports avoid dependence on imported raw materials

VCN - To avoid dependence on imported raw materials and breeds, seafood businesses and localities need to take advantage of the marine farming area with hundreds of thousands of hectares.

More News

PM chairs conference seeking ways to ease capital difficulties

PM chairs conference seeking ways to ease capital difficulties

Prime Minister Pham Minh Chinh on December 7 chaired a conference to seek measures to remove difficulties in credit for production and business activities, aiming to promote growth and macro-economic stability.
New approach needed to better tap Chinese market: experts

New approach needed to better tap Chinese market: experts

Experts at a conference in Ho Chi Minh City on December 6 stressed the need for both producers and exporters to change the mindset and approach to boost exports to China, a potential market for Vietnamese farm produce.
Southeastern region opens door wide for foreign investors

Southeastern region opens door wide for foreign investors

Localities in the southeastern region remain a magnet to foreign investors thanks to their huge potential and incentives.
Unlocking the stagnant resources

Unlocking the stagnant resources

VCN - Mr. Phan Duc Hieu, a National Assembly deputy from Thai Binh Province and a permanent member of the National Assembly's Economic Committee, believes the current challenges differ significantly from the past. It is crucial to unlock the existing resources and reform institutions while addressing numerous issues in economic management.
Eurasia a promising market for Vietnamese exporters: Experts

Eurasia a promising market for Vietnamese exporters: Experts

The Eurasia region, comprising 28 countries stretching from Eastern Europe to Central Asia with a population of more than 400 million and a total GDP of nearly 4.5 trillion USD, is considered a potential export market of Vietnam, according to experts.
Enhancing competitiveness vital for Vietnam to climb up global value chain

Enhancing competitiveness vital for Vietnam to climb up global value chain

Enhancing national competitiveness and capacity of domestic enterprises is vital for Vietnam to climb up the global value chain in the new context of globalisation, heard a workshop held by the Vietnam Institute for Economic and Policy Research (VEPR) in Hanoi on December 5.
Vietnam’s rice exports hit record high since 1989

Vietnam’s rice exports hit record high since 1989

Vietnam’s rice exports this year to the end of November hit a record high since 1989 with an export volume of nearly 7.8 million tonnes and turnover of 4.4 billion USD.
Canada - a potential market for exports

Canada - a potential market for exports

VCN- Canada is currently one of Vietnam's ten most important trading partners in the world, including transit through the United States. After nearly 5 years of implementing CPTPP, exports to Canada have more than doubled, from 4.1 billion in 2018 to 9.9 billion in 2022. However, experts say that there are still not many businesses that can take advantage of tariff opportunities to penetrate the market.
Vietnam attends France trade, investment forum

Vietnam attends France trade, investment forum

Minister of Industry and Trade Nguyen Hong Dien on December 4 attended a forum on trade and investment between France and Southeast Asia.
Read More

Your care

Latest Most read
Cashew exporters from Ivory Coast explore cooperative opportunities with Binh Phuoc

Cashew exporters from Ivory Coast explore cooperative opportunities with Binh Phuoc

A delegation from the Cashew Exporters Association of Ivory Coast (AEC-CI) held a working session with representatives from the Cashew Association of Binh Phuoc province on December 7 on cooperation possibilities between the two sides.
Manufacturers in overdrive to cater to year-end consumption

Manufacturers in overdrive to cater to year-end consumption

The General Statistics Office (GSO) reported optimistic signals in industrial production, attributing the positive trend to businesses securing orders and gearing up for year-end consumer demand.
Vietnam introduces garment and textile products in India

Vietnam introduces garment and textile products in India

The Vietnam Trade Office in India arranged a pavilion to introduce Vietnam's textile and garment products at Intex South Asia, an international textile sourcing show opened in New Delhi on December 7.
Seafood exports avoid dependence on imported raw materials

Seafood exports avoid dependence on imported raw materials

VCN - According to statistics, Vietnam has over 1 million square kilometers of exclusive economic zone, while marine farming area only accounts for more than 20% of the total aquaculture area in the country.
PM chairs conference seeking ways to ease capital difficulties

PM chairs conference seeking ways to ease capital difficulties

Prime Minister Pham Minh Chinh on December 7 chaired a conference to seek measures to remove difficulties in credit for production and business activities, aiming to promote growth and macro-economic stability.
Mobile Version