Positive economic transformations in four months

VCN - In the context of global difficulties and challenges, Vietnam's socio-economic situation in April continues to undergo quite positive transformations, contributing to improving the overall results of the first four months of the year and setting the pace for the following months.
Positive economic recovery following two years of COVID-19 impact Positive economic recovery following two years of COVID-19 impact
Bloomberg gives positive economic outlook for Vietnam in 2024 Bloomberg gives positive economic outlook for Vietnam in 2024
Positive economic outlook in 2024 Positive economic outlook in 2024

Many bright spots

According to representatives from the General Statistics Office, the macroeconomic situation continues to be stable, inflation is controlled, major balances are ensured, and the Consumer Price Index (CPI) in April 2024 increased by 0.07% compared to the previous month. Compared to December 2023, the April CPI increased by 1.19%, and compared to the same period last year, it increased by 4.4%. The average CPI for the first fout months of the year increased by 3.93% compared to the same period last year, and the core inflation increased by 2.81%.

Additionally, the basic monetary market remains stable; lending rates decrease; exchange rates remain stable in line with market developments; ensuring the safety of the banking system. Total state budget revenue in April 2024 was estimated at VND175.6 trillion; accumulated total state budget revenue for the first four months of 2024 was estimated at VND733.4 trillion, equal to 43.1% of the annual plan and an increase of 10.1% compared to the same period last year.

Moreover, in the first four months of 2024, the export of goods continued to maintain a bright picture. The total export and import turnover of goods reached US$238.88 billion, an increase of 15.2% compared to the same period last year; of which, exports increased by 15%; imports increased by 15.4%. The trade balance of goods achieved a surplus of US$8.4 billion.

Foreign Direct Investment (FDI) realized in Vietnam over the past four months reached US$6.28 billion, an increase of 7.4% compared to the same period last year. This is the highest FDI realized in the first four months of the year in the last five years. Also in April 2024, the whole country saw an additional 15.3 thousand newly established enterprises with a registered capital of VND175.8 trillion. This number decreased by 4.1% in terms of the number of enterprises and increased by 13.7% in terms of registered capital compared to the same period in 2023. However, compared to March 2024, the number of new enterprises in April 2024 still increased by 8.4%.

The latest report from the World Bank (WB) also noted that Vietnam's economy was showing various signs of recovery and forecasts that economic growth would reach 5.5% in 2024 and gradually increase to 6% in 2025.

According to Andrea Coppola, WB's chief economist in Vietnam, after experiencing a slowdown in 2023, Vietnam's economy has shown signs of recovery in early 2024. Exports are recovering, domestic consumption and private investment are also gradually increasing. Export prices are expected to increase by 3.5% in 2024, reflecting the gradual improvement in global demand.

Furthermore, the real estate sector is also expected to recover stronger by the end of this year and next year, boosting domestic demand as investors and consumers regain confidence. CPI inflation is forecasted to increase slightly from an average of 3.2% in 2023 to 3.5% in 2024. This forecast reflects the expected increase in prices of goods and services managed by the State, such as education and healthcare, contributing 6.17% and 5.4% respectively to the CPI basket.

Besides, despite ongoing conflicts in Ukraine and the Middle East, oil and commodity prices are expected to decrease slightly in 2024. CPI inflation is expected to stabilize at 3% in 2025 and 2026, based on expectations of stable energy and commodity prices.

In the first four months of 2024, goods exports continued to maintain a bright picture. Photo: TTXVN
In the first four months of 2024, goods exports continued to maintain a bright picture. Photo: TTXVN

Pushing forward the disbursement progress of public investment

A recent forecast by the Asian Development Bank (ADB) suggested that Vietnam's economic growth this year could reach 6%. Nguyen Ba Hung, ADB's chief economist in Vietnam, believed that public investment would be the main driver of growth, but it was necessary to implement plans to fully unleash this potential.

According to the Ministry of Planning and Investment, a 1% increase in public investment disbursement corresponds to a 0.058% increase in GDP. Additionally, every VND of public investment disbursed will stimulate VND1.61 of investment from the private sector. However, the implementation rate compared to the plan is always low, fluctuating around 80%.

To promote growth, ADB emphasized that Vietnam needed stronger measures to address domestic structural weaknesses, such as over-reliance on the export processing industry of FDI enterprises, loose linkages between the export processing industry and the rest of the economy. The young capital market, excessive reliance on bank credit, and complex legal barriers for enterprises.

According to Deputy Minister of Planning and Investment Tran Quoc Phuong, ministries and localities also need to accelerate the efficient disbursement progress of public investment. In particular, they should complete the detailed allocation of the state budget investment plan for 2024 in accordance with regulations, ensuring focus and concentration, avoiding spread, and being suitable for implementation capabilities. Focus investment on large projects, eliminate spread investment, minimize project implementation time, urgently put projects into operation, and improve the efficiency of public investment.

To achieve the export growth target in 2024, Tran Thanh Hai, Deputy Director of the Import and Export Department (Ministry of Industry and Trade) stated that the Ministry was continuing to make efforts to implement many proposed solutions. This includes expanding negotiations on Free Trade Agreements (FTAs), disseminating to realize the benefits from FTAs that Vietnam has signed and put into effect. Innovate trade promotion activities, implement digital transformation, help businesses facilitate the export of goods, and simplify import-export procedure.

By Xuan Thao/ Ha Thanh

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