What is the operating scenario for the last months of the year?

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According to Deputy Minister of Planning and Investment, Mr. Tran Quoc Phuong, thanks to flexible operating policies, Vietnam's economy "next month is better than the previous month, the next quarter is better than the previous quarter". GDP growth in nine months reached 4.24%, with the third quarter alone increasing by 5.33% compared to the same period in 2022, this is quite a high result compared to other countries. The nine-month consumer price index (CPI) increased by 3.16% over the same period last year, leaving room for the National Assembly's target of 4.5% this year to be "completely achieved".

Notably, the bright spot this year is public investment disbursement when nine months reached 51.38%, VND 110,000 billion higher than the same period last year - the highest level compared to the same period in many years. In addition, Deputy Minister Tran Quoc Phuong also said that monetary policy is flexibly managed by the State Bank, helping to lower interest rates to support growth.

On the supply side, industrial production, especially the processing and manufacturing industry, needs a breakthrough and increases dramatically in the last quarter of the year. On the demand side, public investment disbursement is likely to increase better than in the last three months of the year, but demand stimulation solutions are needed to better recover the domestic consumer market.

Regarding the operating scenario for the last months of the year, the Deputy Minister of Planning and Investment department said that, based on the socio-economic results of the first nine months of 2023, forecasting the context and situation in the world and in the country in the coming time, major economies and our important trade and investment partners will still face many difficulties and low growth.

The Ministry of Planning and Investment has advised and reported to the Government on three growth scenarios. Scenario 1, economic growth for the whole year is about 5.0%, the fourth quarter needs to increase by 7.0%; Scenario 2, economic growth for the whole year is about 5.5%, the fourth quarter needs to increase by 8.8%; Scenario 3 has an annual economic growth rate of about 6%, with a 10.6% increase in the fourth quarter.

“With the drastic direction of the Government and the Prime Minister, we strive to achieve the highest possible results in 2023. Compared to the general level of the region and the world, our results are quite positive. But that doesn't mean we should be satisfied and stop striving. In that spirit, the Prime Minister assigned the task to achieve the highest target (6%)", Deputy Minister Tran Quoc Phuong emphasized.

Achieving the 6% growth target requires a breakthrough in the main drivers of growth, especially on the supply side. Photo: Internet.

The outlook for Vietnam's economy in the coming months, in 2024, and the coming years is based on three factors: a relatively good macroeconomic foundation; a large Fiscal policy space is large; the ability to attract investment and transfer in high-tech fields and suggestions, and recommendations in the direction and administration of the Government, Prime Minister, Deputy Minister Tran Quoc Phuong said that the forecast it is difficult, but the opportunity is not non-existent.

With the current trend and positive changes, it can be certain that in the last three months of the year, economic activities will be vibrant. However, there are many issues we need to pay more attention to such as the level of contribution, level of growth, and values that contribute to economic growth.

Achieving the 6% growth target requires a breakthrough in the main drivers of growth, especially on the supply side. In particular, growth in the fourth quarter depends heavily on the speed of recovery of industrial production, especially the processing and manufacturing industry, and our major export industry is electronic products. If there is an increase in demand in large, key export markets, we will have additional important motivation.

Regarding demand, investment continues to grow positively but consumption growth is still weak, total retail sales of goods and service revenue only reached 9%. Thus, there must be solutions to promote domestic consumer demand. Accordingly, domestic tourism and consumption activities at the end of the year and close to the Lunar New Year 2024 will be the basis for expecting the domestic market to also be a pillar of growth.

Regarding exports, despite being a country dependent on the international market, Vietnamese businesses are also making efforts to find orders at the end of the year, increase output, and support workers with jobs and income.

Commenting on the growth target of 6% in 2023, Mr. Shantanu Chakraborty, Country Director of the Asian Development Bank (ADB) in Vietnam, said that to achieve that, the focus needs to be on promoting consumption domestically, because this is within Vietnam's control and will depend heavily on the Government's policies. The government needs to create incentives to promote domestic consumption by increasing people's income, and helping people have more money to consume.

“Besides, in our opinion, to achieve a growth rate of 6% as chosen by the Government, strong fiscal solutions are needed. We must increase the speed of disbursement of public investment. Although public investment disbursement is currently at 51%, which is quite high, it is not enough compared to the set goal," emphasized the Country Director of the Asian Development Bank (ADB) in Vietnam.