Vietnam’s economy bounces back in post-typhoon period

Minister of Planning and Investment Nguyen Chi Dung said that the economy has regained momentum, and achieved many positive results. In the first 9 months, there were bright spots in industrial production, export, and foreign direct investment (FDI) attraction. The country exhibited macroeconomic stability, controlled inflation and ensured major balances while overspending, public debt, Government debt and foreign debt were within acceptable limits.

According to Nguyen Thi Huong, General Director of the General Statistics Office (GSO), the economy expanded 7.4% year-on-year in Q3, surpassing the target set in the Government's Resolution No.1 (6.7%).

During the first nine months, it rose 6.82% compared to the same period last year, with the agro-forestry-fisheries sector climbing 3.2% while industry and construction and service sectors up 8.19% and 6.95%, respectively.

Around 17,700 new businesses were registered in September, bringing the total number of new businesses for the nine months to 183,000, higher than the number of companies withdrawing from the market.

A survey conducted by the GSO found that 82.6% of manufacturing firms expect business conditions to improve or remain stable in the fourth quarter, signaling strong business confidence in the economy's recovery.

Despite the damage caused by Typhoon Yagi, international economic organisations still have confidence in the resilience of Vietnam's economy.

“Vietnam’s economy showed robust recovery in the first half of 2024 and continues to maintain momentum despite global uncertainties,” said ADB Country Director for Vietnam Shantanu Chakraborty, elaborating that the recovery has been driven by improving industrial production and a strong rebound in trade.

“Vietnam’s economy showed robust recovery in the first half of 2024 and continues to maintain momentum despite global uncertainties,” said ADB Country Director for Vietnam Shantanu Chakraborty, elaborating that the recovery has been driven by improving industrial production and a strong rebound in trade.

In its latest report, the International Monetary Fund (IMF) decided to raise its forecast for Vietnam's economic growth in 2024 to 6.1%, higher than the "nearly 6%" projection made in June 2024. The Asian Development Bank (ADB) projected a positive economic outlook for the country, forecasting its gross domestic product (GDP) growth at 6% in 2024 in its September Asian Development Outlook (ADO).

However, the economy still faces many challenges, especially unpredictable fluctuations while the momentum in the domestic market has not been effectively maintained.

The Ministry of Planning and Investment (MPI) pointed out that Typhoon Yagi has severely affected agricultural production and tourism in the north, thus, solutions need to be implemented in a timely manner to help enterprises quickly restore production and business activities to limit negative impacts on growth in the fourth quarter and early 2025.

The MPI projected a 7.6-8% economic expansion in Q4 following positive results in the previous quarter, helping achieve and exceed the full year target of 7% growth. The projection was made based on robust growth trends in various economic sectors, with agricultural production maintaining its growth trajectory, meeting demand of domestic consumption and export.

To achieve the growth target in the fourth quarter, the ministry said that resources must be prioritised to complete policies and regulations, helping to shape up a favourable environment as well as attract large-scale and high-tech investment projects, adding it is a must to foster and renew traditional growth motives in investment, consumption and export.

The MPI laid stress on the necessity to enhance cooperation and organise economic dialogue with comprehensive strategic partners and strategic partners. The nation also needs to promote the working group mechanism that engages with businesses and investors to lure multinational corporations and strategic investors in the areas of chips, semiconductors and AI.

At the same time, it is important to study rational and feasible policy packages to support enterprises and promote new growth drivers, the ministry said./.