Domestic market should be promoted to maintain economic growth: Expert

Hanoi (VNA) – Amid difficulties in the world market, greater attention should be paid to promoting the domestic market, one of the "healthy" pillars at present of the economy, to boost growth, according to Prof. Dr. Bui Quang Tuan, Director of the Vietnam Institute of Economics. 

The expert noted that in 2023, Vietnam has encountered headwinds coming from the unfavourable circumstances both inside and outside the country, coupled with difficulties of an open economy depending on export.

However, achievements that the country gained in the first 10 months of this year have reflected the proper response of the Government as well as efforts and determination of the whole economy. 

Pr. Dr. Tuan noted that in the January-October period, Vietnam posted a trade surplus of 24.6 billion USD. The country welcomed 10 million visitors in the period, 4.2 times higher than that in the same period last year, exceeding the target for the whole year. At the same time, the disbursement of public investment capital reached 65% of the plan, a 23% surge year on year. Total foreign direct investment (FDI) that the country attracted in the period hit 33.3 billion USD, the highest level since 2019.

Particularly, the average inflation in the first 10 months of this year rose 3.2%, much lower than the target of 4.5%, he said.

However, the expert was cautious when forecasting the growth target, suggesting that a goal of 5 - 5.5% is reasonable.

Prof. Dr. Tuan underlined that as it is impossible to depend on the outside for economic recovery, the country should rely more on the domestic market. Healthy pillars should be promoted, while backup plans should be made for weaker ones, he said.  

Tuan asserted that currently, export is a weak pillar, while domestic consumption has great potential to lead the market in the year-end period.

He pointed out that total retail sales of goods in the first 10 months of this year increased sharply, showing the recovery of consumers’ confidence. At the same time, investment from non-State sector has considerably recovered, while FDI attraction has also gained speed and public investment capital disbursement has improved in both terms of quality and quantity.

In the remaining two months of this year that leads to the new year holiday, the domestic demand is likely to surge, providing opportunities for the country’s economy to make breakthroughs, the expert held.

Forecasting the economic outlook in 2024, Tuan said that it is difficult to give a particular figure. Instead, more attention should be paid to guiding policies to create a more foundation for the future, which are policies in promoting digital economy, green economy and sustainable development, he said, stressing that the sooner these orientations are made public, the better businesses can adjust their plan for the rest of the year and also for longer term.

Only when promoting and restoring internal strength will the economy quickly overcome the current difficult and challenging period, said Tuan. By that way, businesses can consolidate and improve their competitiveness to develop faster and stronger in the future, the expert held./.