Six factors positively impact economic growth in 2024

Deputy Minister of Planning and Investment Tran Quoc Phuong responded to the press.

Why is it recommended that the yearly GDP target increase by more than 7%?

At the regular Government press conference held on July 6, answering questions from the press related to economic growth expectations for the last 6 months of the year, Deputy Minister of Planning and Investment Tran Quoc Phuong said that the GDP growth in the second quarter and the first 6 months of 2024 recorded positive results. Especially, the second quarter witnessed a breakthrough growth.

Therefore, in the report at the Government meeting held on the same morning, the Ministry of Planning and Investment researched and developed two scenario options to submit to the Government to serve the direction and administration of the last months of the year.

Firstly, with the base scenario that closely follows the target set by the National Assembly, after the results of the first 6 months of the year, with the target increase of 6-6.5%. If we take the upper limit of 6.5%, the Growth in the third and fourth quarters is also about 6.5%. According to Deputy Minister Tran Quoc Phuong, the 3rd and 4th quarters are the driving quarters of the year. Therefore, the 6.5% level is completely feasible, and there is absolutely a basis to expect higher results, exceeding the target proposed by the National Assembly, a higher increase of 6.5%.

Therefore, the Ministry of Planning and Investment has also calculated, advised, and reported to the Government a higher plan, scenario 2 with the whole year expected to reach 7%.

As followed by this plan, the third and fourth quarters will increase by about 7.4-7.6% respectively. The Deputy Minister stated that although over 7% is a high level, it is completely possible to strive for it in the context that the economy is trying to overcome limiting factors.

Therefore, the Ministry of Planning and Investment reported to the Government to select a new, updated scenario compared to Resolution 01, with a yearly growth of about 6.5-7%. In particular, the Ministry of Planning and Investment boldly proposed to the Government to achieve the target of striving higher than 7% to have more drastic directions towards this goal.

Analyzing more specifically the basis for this recommendation, according to the representative of the Ministry of Planning and Investment, there are 6 factors that create a positive impact on economic growth in the remaining months of 2024.

First, the positive growth trend of the region and the world.

Second, the driving force for investment, including investment from the non-state sector, especially foreign direct investment (FDI), is growing positively.

Third, export dynamics have recovered and the proportion of businesses with export orders has increased rapidly. This is a very good sign, but we still face difficulties in exporting such as escalating transportation costs or sea shipping route shifting.

Fourth, Vietnam’s tourism rebounds attract more foreign international tourists so our goal is more than 8 million visitors within the first 6 months of the year. According to the Deputy Minister, we can absolutely aim for this year's expectation of more than 10 million tourists, about 14-15 million visitors, which can positively impact the service sector.

Fifth, currently, the National Assembly has approved three very important laws taking effect 5 months earlier: the Land Law, the Real Estate Law and the Housing Business Law. These three laws will have a huge impact on the real estate market, which still faces many challeges in the first 6 months of the year. With new regulations that are more open and favorable, the real estate market will show signs of improvement in the last 6 months of the year, positively impacting economic growth.

Sixth, direction and administration work. Currently, the Government's direction is very drastic and requires ministries, branches and localities, especially the four localities that are the growth engines of the economy, to be more drastic in promoting growth goals. .

3 important factors to attract FDI

Also at the press conference, responding to the ability to attract FDI in the next 6 months, the Deputy Minister of Planning and Investment said that in the first 6 early months, the results of attracting FDI remained at a good level. Total registered FDI capital of 6 months reached nearly 15.2 billion USD, an increase of 13.1%. Of which, newly registered FDI was more than 9.5 billion USD, an increase of 46.9% - this is a noteworthy number, because newly registered capital means there are new projects to increase production and business capacity of the economy.

Realized FDI capital reached about 10.8 billion USD, an increase of 8.2%, also a good growth rate. Of which, many new, large-scale projects are also invested in.

"Therefore, the Ministry of Planning and Investment is extremely optimistic about the ability to attract FDI in the last 6 months of the year. This is not only a subjective assessment of domestic agencies but also foreign assessments. Assessment of domestic and foreign financial institutions about the prospects of attracting FDI, the positive trend is still maintained thanks to three very important factors," Deputy Minister of Planning and Investment Tran Quoc Phuong commented.

First, the adaptive diversification strategy of investors, which is the trend after the Covid-19 pandemic is also an opportunity for Vietnam to receive investment capital from the world. .

Second, Vietnam's economic growth in the first quarter shows many prospects and investors will have high expectations for the economy to have great recovery.

Finally, the macroeconomy is stable, despite many difficulties, especially external difficulties related to the price of some strategic commodities on the world market. However, the consumer price index (CPI) is still at about 4%, within the target set by the National Assembly, and the inflation index is at more than 2%. Therefore, this is a secure signal for investors to take consideration.