Vietnam's economy is recovering well

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Overcoming many difficulties, the economy has shown positive signs in the first 9 months of this year, with the gross domestic product (GDP) in the first 9 months increasing by 6.82% over the same period of last year, an increase of more than 1.5 times compared to the 4.4% in the same period of last year. What "pillars" contributed to this result, sir? This result was mainly contributed by the industrial and service sectors. On the aggregate demand side, trade recovery and positive FDI inflows were also the main growth drivers. Import and export of goods increased faster than expected, with total import and export turnover reaching USD 578.5 billion, up 16.3% over the same period, with a trade surplus of USD 20.8 billion. This is a fairly positive trade surplus in the period 2020 - 2024. At the same time, state budget revenue exceeded the plan while public spending decreased compared to the same period in 2023, leading to a continued high budget surplus, creating room for continued fiscal policies in 2024 such as tax exemption, extension, and reduction policies, especially in the context of industries and sectors suffering damage from Typhoon Yagi. In addition, credit growth has recovered quite well, contributing positively to promoting growth and investment. The State Bank has continued to implement relatively successful flexible monetary policies in the recent period to reduce shocks and intervene in liquidity, helping to lower interest rates and support capital costs for the economy without having to intervene in operating interest rates. Regarding business activities, there have been more than 183 thousand newly registered and returning businesses in the past 9 months, higher than the whole year's figure for the 2018-2021 periods. According to experts, besides the advantages, Vietnam’s economy in the remaining months of the year will also face many challenges. Could you please tell us more about these challenges? Domestically, although the economy has many positive bright spots, there are still risks and challenges ahead. Although the recovery process continues in major economies such as the US, China and the EU in the third quarter of 2024, there have been signs of a slowdown compared to the second quarter of 2024. The PMI (Purchasing Managers' Index) of the US and EU has fallen below the 50-point threshold while China also recorded a decrease of 3 points, down to 51 points. This could have a negative impact on Vietnam's foreign economic sector, as trade has always been considered the main driving force for growth in the current period. In addition, risks from the conflict in the Middle East also increase imported inflation, affecting the export competitiveness of Vietnamese enterprises. In addition, supply chain disruptions or rising input costs will affect Vietnam's export capacity in the fourth quarter of 2024. Foreign direct investment (FDI) flows, which are the main driving force for growth in Asian countries, including Vietnam, are also showing signs of slowing down in the third quarter of 2024. Therefore, it is necessary to carefully study FDI flows in the world and into Vietnam to have corresponding policies in the coming time. In addition, the lag from the impact of Typhoon Yagi will also be an important factor affecting Vietnam's growth in the fourth quarter of 2024 and extending into early 2025. Faced with the above difficulties, it can be affirmed that balancing growth drivers, especially between export drivers and domestic market growth, ensuring macroeconomic stability and sustainable growth is even more urgent. From the results achieved in the third quarter of 2024 as well as the first 9 months of 2024, how do you forecast the growth target in 2024? VEPR has given two high and low scenarios, specifically with the high scenario, growth in the fourth quarter of 2024 will be flat at 7.4%; the low scenario, growth in the fourth quarter of 2024 will be below 7%. Thus, with the low scenario, the growth rate in Q4/2024 is below 7%, combined with the deviation of growth forecasts of organizations, we forecast that the growth rate for the whole year of 2024 will fluctuate at the level of 6.84%. In the high scenario, growth in the fourth quarter of 2024 will be flat at 7.4%, and growth for the whole year of 2024 is expected to reach the 7% target set by the Government for 2024.