Hanoi (VNA) - With positive growth in the past months of 2024, economic experts have a common view that traditional and new economic growth drivers must be exploited effectively.
Macro-economic stability is maintained
According to the Ministry of Planning and Investment’s report, the economy needs to achieve 6.5% -7.4% growth in the third quarter to create a foundation to exceed the socio-economic development target in 2024 with a growth rate of 6.5% - 7%.
Economist Can Van Luc of the Joint Stock Commercial Bank for Investment and Development (BIDV), pointed out that the macro economy continued to maintain stability and major balances were ensured. On that basis, the confidence of businesses and people has been gradually strengthened.
He said that the analysis team at BIDV gave optimistic forecasts for economic growth for the whole year (but a bit more cautious than the Ministry of Planning and Investment) in the range of 6.5% - 6.7%. In particular, some factors such as the increase in basic salary are expected to impact GDP by 0.3% - 0.5 percentage points.
Luc further noted that inflationary pressure in the last months of 2024 will likely be higher than the same period last year but will generally remain under control with the average CPI increasing by about 3.8% - 4.2%. The increase comes from a rise in costs, such as energy, raw materials, logistics, tuition, hospital fees, and available credit.
In addition, Luc emphasised that external challenges still exist. In particular, challenges on the horizon include geopolitical crises, competition between major countries, inflation and interest rates, slow recovery of the world economy, and risks in energy security, food, and natural disasters.
Regarding the domestic situation, he said that some traditional growth drivers have not recovered evenly, while institutions for new growth drivers, such as the digital economy and energy transition have been slow compared to development requirements. Business operations still face many difficulties, and legal problems have not been resolved promptly regarding land and real estate. There is financial pressure from debt maturity, corporate bond debt, and high input costs. In the market, although bad debt at credit institutions is under control, a major challenge is looming as the Law on Credit Institutions 2024 has restricted the right to seize assets used to secure debts.
Regarding inflationary pressure, Nguyen Anh Duong, Director of the General Research Department under the Central Institute for Economic Management (CIEM), emphasised that the impacts of wage increases could increase costs. Timely solutions are needed with the average CPI expected to increase by 4.12%. In addition, CIEM's analysis team forecasts GDP growth for the whole year ranges from 6.55% to 6.95%.
Duong shared that CIEM's research report pointed out some favourable points because the world economy could recover more positively. International organisations have assessed that the global economic outlook in 2024 could be better than previous forecasts. In addition, the foreign investor community continues to be interested in and confident in Vietnam's economic prospects along with the need to diversify investment locations. Regarding management, the thinking and policy framework for new economic models are expected to be further improved, which will help businesses plan to transform and exploit new opportunities. However, Duong also said that the survey from CIEM shows that the ability to connect domestic businesses with foreign direct investment enterprises is improving slowly. In addition, business awareness and transformation capacity on new trends in digital transformation and requirements of the green economy are still limited.
Implementing the Government Resolution
To achieve growth in 2024 according to the Government plan, Luc emphasized that ministries, sectors, and localities need to implement Resolutions No. 01/NQ-CP and No. 02/NQ-CP of the Government and Resolutions of the National Assembly. Administrations at all levels need to closely follow the international economic-financial-political situation, pay attention to high-tech risks, cyber security, and fraud, and strengthen the confidence of investors by stabilizing the financial, gold, and real estate markets.
To promote growth and stabilize the macro economy, Luc said that it is necessary to focus on issuing policies to remove obstacles relating to legal issues, land valuation, VAT refund, access to capital, social housing, fire prevention and fighting. The human factor is the most important, based on effectively implementing Decree 73/2023/ND-CP on encouraging and protecting dynamic cadres who dare to think, dare to do, and dare to take responsibility for the common good.
Regarding the growth target, the expert emphasized the need to effectively promote traditional driving forces of export, investment, and consumption. Also, the promotion of the digital and green economy, regional linkages, public investment disbursement, and fiscal support packages will aid growth.
In the long term, Luc recommended promoting growth quality, such as labour productivity, application of scientific and technological advances, and development of high-quality human resources. Management agencies at all levels should further promote economic restructuring, to attract and allocate resources effectively.
In addition, he recommended competent authorities implement state budget spending discipline to ensure the set targets for 2024 and reduce pressure on budget revenue. The regional budget mechanism needs to be researched and developed, including considering the establishment of a Regional Development Investment Fund.
These moves will create momentum for economic development and improve regional connectivity. Regarding trade, sectors should study appropriate tax mechanisms for imported goods to ensure a balance between tax collection targets, control costs related to tax collection and create momentum for e-commerce development./.
