Hanoi (VNA) - After a challenging period at the end of 2022 and early 2023, Vietnam's economy recovered rapidly in the first half of 2024. The assessment by Paulo Medas, Head of the International Monetary Fund (IMF)'s Vietnam Mission, in his interview granted to the Vietnam News Agency in Washington D.C. has shown a predominantly bright outlook in the first six months of this year.
According to many international experts, Vietnam’s economic growth of 6.42% in the first half of this year is a positive and commendable achievement, given the fact that the global economic situation, now slowly recovering from impact of the COVID-19 pandemic, remains unstable with numerous underlying risks.
While co-chairing a dialogue with leaders of about 20 major WEF economic groups on the sidelines of the 15th WEF Annual Meeting of the New Champions in Dalian city, China's Liaoning province, with Vietnamese Prime Minister Pham Minh Chinh in June, Professor Klaus Schwab, Founder and Executive Chairman of the World Economic Forum (WEF), once again highlighted Vietnam as a rising star of the world economy.
In fact, in the period, Vietnam's economy faced significant pressures, both internally and externally. Alongside common challenges, the economy had to confront internal difficulties, including a rise in inflation which affects overall demand and slows recovery though still under control, increased airfare that impacts domestic tourism, and low credit growth. Weathering these challenges, the country's Gross Domestic Product (GDP) growth rebounded strongly, at 6.93% in the second quarter and 6.42% in the first half of the year, surpassing the government's set scenario of 5.5-6%.
That Vietnam's economy is resilient against "headwinds" and accelerates beyond forecasts demonstrates the effectiveness of policies and resolute actions from central to local levels. Kim Yong Jae, Standing Commissioner of the Financial Services Commission (FSC) of the Republic of Korea, stressed that this economic growth is a testament to the efforts of the Vietnamese government and people.
Thanks to the drastic participation of the entire political system to carry out the proposed tasks and solutions, Vietnam's macro-economy in the first half of 2024 remained stable, with exports increasing strongly by 14.5%, and a trade surplus of 11.63 billion USD.
These economic achievements in the period have opened up expectations for better growth in the last months of the year. Economic experts both at home and abroad said they believe that Vietnam's economy will continue to recover in the second half of 2024. The IMF expert forecast the Vietnamese economy will continue to recover, but at a slower pace, and may expand by over 6% for the whole year. Major banks such as the Asian Development Bank (ADB), the Standard Chartered, and the Hong Kong and Shanghai Banking Corporation Limited (H SBC) have also made similar forecasts.
However, to reach this growth rate, experts stressed the need for Vietnam to make more efforts as there are still many latent risks, including global geopolitical fluctuations, the devaluation of the Vietnamese domestic currency, and rising public sector wages that can lead to an inflation risk.
Vietnam was advised to balance economic recovery and inflation risk management, and keep a close watch on the situation and be ready to take actions in case inflation rises sharply.
Besides, Vietnam needs to have a good capital market, which requires good institutions and transparent economic governance to operate effectively.
The European Chamber of Commerce in Vietnam (EuroCham) on July 15 released its Business Confidence Index (BCI) report for the second quarter of 2024, which underscores the necessity for ongoing policy adjustments to maintain momentum.
Chairman of the EuroCham Vietnam Dominik Meichle held that Vietnam's economic potential is undeniable, and the European business community remains confident in its long-term growth.
Meanwhile, the US’s S&P Global Ratings affirmed its 'BB+' long-term and 'B' short-term sovereign credit ratings on Vietnam, with a “stable” outlook on the long-term rating, the website disclosure.spglobal.com reported on June 20.
The agency forecast that Vietnam's economy will accelerate over the next 12 months as global demand picks up and the country gradually overcomes its domestic challenges. It highlighted that the ratings reflect the country's strong economic growth outlook, moderate government debt levels, and generally sound external position. As multi-national conglomerates diversify their operations in the region, Vietnam will likely continue to attract substantial foreign direct investment (FDI) inflows to its export manufacturing sector over the next several years./.
UOB keeps Vietnam’s GDP growth at 6%
Singapore-based United Overseas Bank has maintained its forecast for Vietnam’s economic growth at 6% for the whole year on the back of the recovery of both domestic and foreign demand as well as production sector in the first half.
