New fulcrums for economic growth

VCN - According to experts, despite the improvement, Vietnam's economy in 2024 still has potential risks, weighing on growth solutions until the end of the year. Accordingly, the application of science and technology, innovation, and green transformation are considered important factors and new growth drivers for Vietnam.
Increasing investment in research and development (R&D) allows Vietnam's economy to grow by 12-15 percent per year until 2045.
Increasing investment in research and development (R&D) allows Vietnam's economy to grow by 12-15 percent per year until 2045.

Innovation will be the foundation

GDP growth in the first quarter is estimated to increase by 5.66 percent compared to the same period in 2023, higher than the growth rate of the first quarter of 2020-2023. With the good start of the economy as all three important growth sectors (investment, export and consumption) are growing strongly that shows positive signs and bright prospects for the economy.

Commenting on the economic growth situation in the first quarter, Mr. Nguyen Quoc Viet, Deputy Director of the Vietnam Institute for Economic and Policy Research (VEPR), said that despite an improvement on last year's low growth, the Vietnam's economy in 2024 still has potential risks, creating stress on growth solutions until the end of the year.

Specifically, with the positive trend of the first quarter, if Vietnam continues to maintain macroeconomic stability, persist in policies to support businesses in recovering production and business (tax exemptions, reductions in loan interest rates) and policies to stimulate domestic consumption, the upward trend in domestic consumption and exports will spread in the next quarters.

However, in the complex and unpredictable developments in the global economy, slow growth recovery along with pressures from prices, inflation and the tendency to reduce consumer demand, domestic and international trade are still major obstacles and challenges in Vietnam's economic management and development.

Besides, due to geopolitical tensions, the pressure to maintain high interest rates, fluctuations in exchange rates, and even fluctuations in assets commonly used for investment such as gold also puts pressure on Vietnam's ability to maintain macroeconomic stability and its ability to expand export markets.

“In in 2024, although inflation is still under control, there will be price increases for certain items such as electricity, healthcare, education, and gasoline compared to 2023, which will create pressure on inflation in this year. This will narrow the policy space to support the recovery of domestic economic growth.

Therefore, we need to maintain appropriate interest rates for a long time, so that banks can provide capital to businesses for production. This depends on maintaining macroeconomic stability and exchange rate stability," Mr. Viet said.

However, according to experts, the main growth drivers of the economy are showing signs of slowing down and are under great pressure from outside. Meanwhile, the social labor productivity growth target was not met for the third consecutive year.

Therefore, in the time to come, in order to raise the GDP growth rate in 2024 to over 6 percent and strive to complete this target for the entire term at the highest level, in addition to strongly promoting the three growth drivers, (investment, consumption, export), need new fulcrums for growth. In particular, the application of science and technology and innovation are considered important factors and new growth drivers for Vietnam. Increasing investment in research and development (R&D) allows Vietnam's economy to grow by 12-15 percent/year until 2045.

Opportunity to change the growth model

According to a report by the National Innovation Center, innovation positively impacts the national economy, contributing up to 95 percent of the economy's competitiveness, 66 percent of innovation value will impact people's lives. It can be said that innovation through science and technology is the key to helping Vietnam overcome the "middle income trap" and soon escape from dependence on low technology and resources.

Therefore, Vietnam is increasingly perfecting the factors that promote innovation effectively. The reality of the development process of major economies in the world shows that transformations in science, technology and innovation will directly change the face of the economy. Therefore, innovation is one of the important indicators that guide the development center of each country.

Vietnam has a strong position and strength to take advantage of opportunities and develop the economy based on science, technology and innovation. Therefore, it is necessary to strongly promote resources and support the development of the business community, which is truly an important driving force in promoting socio-economic development, Deputy Director in charge of the Department of National Account System Nguyen Thi Mai Hanh said.

Carolyn Turk, Director of the World Bank in Vietnam, also said that Vietnam will need new drivers for economic growth to achieve its ambition of becoming a high-income economy by 2045 and innovation will be the basic foundation in raising income and improving growth quality.

Notably, according to Prof. Dr. Hoang Van Cuong, 2024 is also the year Vietnam has the opportunity to change its growth model. Accordingly, Vietnam must immediately seize new opportunities and growth drivers such as green transformation and digital transformation trends. This motivation not only stimulates domestic resources but also awaits foreign investment flows and green financial resources in this transition process.

“A once-in-a-generation opportunity to transform Vietnam's economy is the trend of shifting investment flows of high-tech industries. Typically, the US will shift limited high-tech investment industries to countries that are considered trustworthy. In particular, Vietnam is one of the countries receiving investment flows from the US in high-tech industries such as semiconductor chip manufacturing or artificial intelligence.

If we can capture this shift, it will create an opportunity for Vietnam to transform and change its growth model, from an economy dependent on investment activities in processing and low-value labor to a new growth model of industries based on science and technology, new products such as chips or artificial intelligence.

These are also industries that create very high added value, requiring us to use high-quality human resources, not labor-intensive like the textile, processing, and assembly industries. At the same time, it is also a condition for us to change the growth model, create outstandingly high labor productivity and is a turning point, a key factor to shift from an economy with low labor productivity to high labor productivity, from a middle-income country to make a breakthrough to become a high-income country, Prof. Dr. Hoang Van Cuong affirmed.

By Tuan Phong/Kieu Oanh

Related News

New trends in digital transformation for businesses

New trends in digital transformation for businesses

VCN - Given the rapid and substantial changes in technology, finding suitable solutions and keeping up with trends is a critical issue for businesses.
The new race in developing green and smart industrial parks

The new race in developing green and smart industrial parks

VCN - Vietnam is an attractive destination for foreign investors in the fields of high-tech equipment manufacturing. Accordingly, along with digital transformation, the transformation of the model from simple industrial parks to green industrial parks and ecological industrial parks is being focused on implementation by localities.
Fiscal policy is expanded and flexible to promote economic growth 2024

Fiscal policy is expanded and flexible to promote economic growth 2024

VCN - Recently, the Ministry of Finance has proactively researched, proposed, and submitted to competent authorities as well as issued financial support policies for the economy, with a total of about VND700 trillion. This is a particularly important resource that contributes to promoting the economic recovery process after the pandemic. According to experts, in 2024, flexible and prudent fiscal policy will continue to be the foundation for the economy.
Make use of the most of favorable factors for economic growth

Make use of the most of favorable factors for economic growth

VCN - Commenting that the economy can absolutely achieve growth according to the set target, but according to Dr. Nguyen Tu Anh (photo), Director of Department, Director of the Center for Economic Information, Analysis and Forecasting, Central Economic Commission, management agencies need to resolve and clear the bottlenecks that have been identified since real estate market, corporate bonds... to restore aggregate demand.

Latest News

PM orders building socio-economic development plans, budget estimates for 2025

PM orders building socio-economic development plans, budget estimates for 2025

Prime Minister Pham Minh Chinh on May 22 signed a directive on the building of the socio-economic development plans and state budget estimates for 2025.
Dong Nai aims to become one of Vietnam

Dong Nai aims to become one of Vietnam's largest economic centres by 2030

The southern province of Dong Nai aims to become one of Vietnam's three largest economic centres, after Hanoi and Ho Chi Minh City, according to the province's development goals for 2030.
To Lam becomes new State President

To Lam becomes new State President

The 15th National Assembly (NA) on May 22 elected To Lam as the President of the Socialist Republic of Vietnam.
Increase foreign investment resources from improving the business environment

Increase foreign investment resources from improving the business environment

VCN - In the two years 2024-2025, the proportion of foreign invested enterprises (FDI) expected to expand production and business will decrease compared to previous years, reflecting a more cautious trend of FDI enterprises due to the impact of the current unpredictable global economic context.

More News

Rising middle class pushes wealth management potential in Vietnam

Rising middle class pushes wealth management potential in Vietnam

The personal financial assets market in Vietnam is forecast to reach hundreds of billions of US dollars in the next few years, providing significant opportunities for wealth management services.
The carbon credit market opens up many opportunities for businesses

The carbon credit market opens up many opportunities for businesses

VCN - Vietnam has great potential for carbon credit supply. Many businesses have proactively invested in technological innovation to participate in this market.
Quang Ninh: Administrative reform, improving infrastructure, promoting import and export

Quang Ninh: Administrative reform, improving infrastructure, promoting import and export

VCN - Import-export activities through border gates in Quang Ninh province have prospered thanks to the implementation of accompanying solutions to support businesses and the determination and efforts of authorities at all levels.
National Assembly opens 7th session

National Assembly opens 7th session

The 15th National Assembly (NA) convened its 7th sitting in Hanoi on May 20 morning, with the opening session broadcast live by several national and NA television and radio channels.
The quality of economic management at the provincial level continues to improve

The quality of economic management at the provincial level continues to improve

VCN - In production and business activities, support from local authorities plays a very important role. The good news is that in a context of economic pressure, businesses have appreciated the positive efforts of provincial and city governments in improving the business environment compared to before.
Promoting e-commerce human resources training in Việt Nam

Promoting e-commerce human resources training in Việt Nam

E-commerce staff are quite young and can quickly accept new technology, which could start businesses in the digital environment.
National Assembly to work on personnel affairs on May 20

National Assembly to work on personnel affairs on May 20

Personnel work will be tabled right after the seventh session of the National Assembly (NA) opens on May 20, according to Secretary General of the NA and Chairman of its Office Bui Van Cuong.
High-quality science, technology human resources key to sustainable growth

High-quality science, technology human resources key to sustainable growth

To achieve sustainable development and help the economy take off, high-quality human resources and advancements in science and technology should be seen as key components, according to insiders.
Vietnam, France look to boost economic partnership

Vietnam, France look to boost economic partnership

Deputy Minister of Planning and Investment Tran Quoc Phuong and French Minister Delegate for Foreign Trade, Economic Attractiveness, Francophonie and French Nationals Abroad Franck Riester co-chaired the 8th session of the Vietnam-France High-Level Dialogue on Economy in Paris on May 17.
Read More

Your care

Latest Most read
PM orders building socio-economic development plans, budget estimates for 2025

PM orders building socio-economic development plans, budget estimates for 2025

Prime Minister Pham Minh Chinh on May 22 signed a directive on the building of the socio-economic development plans and state budget estimates for 2025.
Dong Nai aims to become one of Vietnam

Dong Nai aims to become one of Vietnam's largest economic centres by 2030

The southern province of Dong Nai aims to become one of Vietnam's three largest economic centres, after Hanoi and Ho Chi Minh City, according to the province's development goals for 2030.
To Lam becomes new State President

To Lam becomes new State President

The 15th National Assembly (NA) on May 22 elected To Lam as the President of the Socialist Republic of Vietnam.
Increase foreign investment resources from improving the business environment

Increase foreign investment resources from improving the business environment

VCN - In the two years 2024-2025, the proportion of foreign invested enterprises (FDI) expected to expand production and business will decrease compared to previous years, reflecting a more cautious trend of FDI enterprises due to the impact of the curren
Rising middle class pushes wealth management potential in Vietnam

Rising middle class pushes wealth management potential in Vietnam

The personal financial assets market in Vietnam is forecast to reach hundreds of billions of US dollars in the next few years, providing significant opportunities for wealth management services.
Mobile Version