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The Ministry of Planning and Investment recently announced a loss of VND40,000 billion due to the storm No. 3 (Yagi) impact, which could cause GDP in 2024 to be 0.15% lower than the previous scenario. How do you assess this figure and what solutions does Vietnam need to implement to quickly overcome the impacts on economic growth in 2024?

In my opinion, Vietnam is still in the process of overcoming the consequences of the storm, so the estimated damage may not be the final figure because in addition to human losses, damage to existing assets and future income of the people are uncountable. What needs to be done right now is to provide emergency relief to affected people, rebuild efforts, and support production and business recovery after the storm. The final impact on growth will depend on the Government's reconstruction efforts.

Regarding emergency relief after natural disasters, Vietnam has provided VND350 billion to localities, in addition to resources contributed by the entire population and support from international organizations. In the long term, the Government has also introduced measures to restore agricultural production. However, in my opinion, a very important supporting factor in reconstruction after storms and floods but rarely mentioned is insurance.

According to international practice, the first resource contributing to reconstruction is insurance. For example, in the US, Hurricane Katrina (2005) caused 120 billion USD in damage, of which insurance contributions due to natural disasters alone were more than 40 billion USD, this amount also directly contributed to the recovery of assets and incomes of those affected by the storm.

Therefore, the best recovery mechanism in the short and medium term is to rely on insurance and support from the budget. Specifically, public investment capital will help restore infrastructure affected by natural disasters, followed by support programs for agricultural production such as support for recovery in the fields, support for seeds and raw materials for the next crop so that people can soon recover production...

Regarding the impact of typhoon Yagi and the post-typhoon circulation, which could cause GDP in 2024 to be 0.15% lower than the previous scenario. This seems to be an insignificant figure at first, but this is also the final figure after taking into account reconstruction and recovery efforts after the typhoon to contribute to the growth figure.

Recently, the US Federal Reserve (FED) decided to cut interest rates by 0.5%, and announced ongoing interest rate cut (expected to reduce another 0.5% from now until the end of 2024). In your opinion, how will this move by the FED affect Vietnam's economic growth in the coming time?

Personally, the impact of each FED interest rate cut on Vietnam's growth is not much. Instead, this is only considered one of many uncertain factors that can affect Vietnam's economy. If we compare the FED's 0.5% interest rate cut, some uncertainties from the upcoming US election results are forecast to have a greater impact on Vietnam's exports to the US.

However, in addition to the 0.5% interest rate cut in September, there are forecasts of two more cuts in the remaining months of the year, each by 0.25%, which shows that the “health” of the US economy is facing many difficulties, reducing consumer demand, including “Made in Vietnam” goods. This will certainly lead to risks for Vietnam’s exports to the US in the coming time.

Along with the existing risks, how do you forecast Vietnam's economic growth in 2024?

Vietnam's growth momentum is exposed to potential risks. Specifically, external demand in some major economies remains weak, while geopolitical tensions, rising protectionism and uncertainties related to the US election in November could fragment trade, negatively affect exports, manufacturing and employment.

In addition, the prospect of a slow recovery in the global economy could continue to limit demand, adversely affect exports, manufacturing and employment. Vietnam's exports face increasing competition due to trade shifts from the restructuring of global value chains for products such as apparel, textiles and electronics, as well as risks from escalating geopolitical tensions and rising protectionism. In addition, weather-related phenomena and the impact of climate change are also short-term risks to Vietnam's economy.

Regarding economic growth in 2024, Vietnam economy reveals optimistic signals, of which gross domestic product (GDP) growth is estimated at 6% in 2024 and 6.2% in 2025. Accordingly, the Vietnamese economy recorded significant recovery in the first half of 2024 and will continue to maintain growth momentum, despite global uncertainties. The steady recovery has been achieved due to improved industrial production and strong trade growth.

To maintain growth momentum in 2024 and 2025, ensuring macroeconomic stability with a more balanced combination of monetary and fiscal policies, along with comprehensive state management reforms, is extremely important. Weaker-than-expected external demand requires continued policy measures to boost business activities and stimulate domestic demand.

Thank you!