Promoting reforms and supporting businesses to spread farther

Prof. Dr. Hoang Van Cuong

How do you assess the "health" of the business community in the early months of 2024 and the forecast for the entire year?

The economy in the first quarter of 2024 has seen many bright spots thanks to growth drivers in exports and investments, as well as supportive mechanisms for business production activities. However, the resource base of businesses has been constrained over the years due to the impacts of the pandemic, hence, supportive measures from the state are crucially needed.

The recovery trends of the global economy are currently not too robust, yet pressures such as inflation and deflation in major markets have substantially subsided. Regarding opportunities with new markets like China, we have established relationships that facilitate easier openings for agricultural exports. Therefore, I expect that from now until the end of the year, with many opportunities emerging, this will serve as an important motivation for business recovery.

Businesses still need support from state agencies; could you specify what kind of support is needed?

With existing policies, the capital market has become accessible at reasonable prices, but the corporate bond market also needs to be further opened. Additionally, there must be mechanisms in place to ensure safety for individual investors who lack experience but can flexibly switch with professional investors when accessing the corporate bond market.

Moreover, for businesses to effectively access the global market, there initially needs to be support and cooperation among businesses, along with guidance from state agencies and industry sectors. For instance, to boost agricultural exports to the Chinese market, the state needs strategies for domestic businesses to collaborate and establish supply chains. By doing so, small resources can supplement each other to create a significant combined resource.

Furthermore, since institutions play a critical role, it is necessary to continue to drive reforms to create impactful changes. Simultaneously, adjustments must be made to seize new growth drivers such as the green and circular economies. These new growth drivers, expected to develop in the long term, represent a global trend. Therefore, businesses must adapt to this trend; otherwise, if they fail to meet the green transformation criteria, they will not be able to penetrate the global market. Businesses also risk missing out on utilizing new resources such as green finance and green investment opportunities.

What role do you foresee monetary and fiscal policy playing in unlocking growth drivers this year?

Both monetary and fiscal policies play supportive roles in promoting growth drivers this year. Currently, these policies have overcome challenging phases, helping maintain a stable financial environment. The focus has shifted from primarily controlling financial, fiscal, and monetary pressures to prioritizing growth drivers.

Regarding monetary policy, bank interest rates are maintained at a relatively low level, and the credit growth limit has been set to the maximum from the beginning of the year. Alongside monetary policy, fiscal policy is also being expanded. Specifically, Vietnam has been implementing tax deferrals and reductions, such as VAT reductions or some environmental taxes, helping to alleviate the cost burden for businesses. Additionally, Vietnam is enhancing investment resources to create more demand resources, providing momentum for new growth.

Thank you, sir!