Hanoi (VNA) - In the context of a challenging and volatile global economy, Vietnam needs bold and timely solutions to overcome difficulties, seize opportunity, and maintain growth momentum.
Nguyen Thu Huong, General Director of the General Statistics Office, clarified the current socio-economic picture and response strategies in an interview granted to VietnamPlus.
Motivation for acceleration and breakthrough
Reporter: Could you share an overview of the socio-economic situation in Vietnam during the first month of 2025?
GSO General Director Nguyen Thu Huong: Unlike 2024, this year, the country celebrated both the New Year's Day and the Lunar New Year (Tet) in January. This was also the time when ministries, sectors, and localities began implementing Government Resolution No. 01/NQ-CP dated January 8, 2025, creating momentum for acceleration and breakthrough.
Overall, we achieved encouraging results, though there were also significant challenges. In agriculture, the progress of winter-spring rice planting increased 3.9% compared to the same period last year. Livestock remained stable, and aquaculture intensified harvests to ensure supply for the Lunar New Year.
Additionally, the service sector also recorded strong growth, with total retail sales of goods and consumer service revenue increasing by 9.5% compared to the same period last year, indicating a sharp increase in consumer spending during Tet. Alongside this, passenger and cargo transport also grew at double-digit rates, at 17% and 12.5%, respectively. Notably, the tourism sector also showed positive signs, with nearly 2.1 million international visitors to Vietnam, a 36.9% increase compared to the same period last year, reflecting the effectiveness of international tourism attraction programmes.
Another bright spot was that FDI, with an additional 2.73 billion USD injected into projects underway, 6.1 times higher than in the same period of 2024, reflecting investor confidence in Vietnam. Disbursed FDI reached 1.51 billion USD, an increase of 2% year-on-year. On a macro level, inflation was still under control, with the consumer price index (CPI) rising 3.63% compared to the same period last year. Social welfare commitments were also met, with over 13.5 million people receiving gifts, totalling more than 7.94 trillion VND and 6,876 tonnes of rice, ensuring no one is left behind during Tet.
However, alongside these achievements, we also faced significant challenges. The industrial production slowdown was reflected in the industrial production index (IIP), which only rose by 0.6% from the same period last year and even declined 9.2% compared to the previous month. Many key industrial sectors saw a year-on-year decrease, particularly in large industrial areas due to fewer working days.
Additionally, the total import-export turnover decreased 3.5% compared to last year, down to 63.15 billion USD. Exports fell 4.3% to 33.09 billion USD. Another concern is the high number of businesses exiting the market, with 58,300, significantly higher than the 33,500 entering the market.
In agriculture, the planting area for some annual crops has decreased due to reduced market demand. More concerning is the sharp increase in the area of damaged forests compared to the same period last year, totalling 38.7 hectares, up 90.6%.
Flexibility amid multiple challenges
Reporter: In the context of the global economy, there are many risks, particularly a potential trade war. How do you assess this risk and its potential impact on Vietnam?
GSO General Director Nguyen Thu Huong: A global trade war is a looming risk, especially amidst tensions among major economies. Rising protectionism, fierce competition over technology and supply chains, along with geopolitical conflicts, all contribute to this increasing threat. In 2025, the global economy could face significant challenges, especially from the protectionist trade policies and tariffs of the US, as well as the risk of escalating trade tensions due to retaliatory tariffs between major economies. The US is threatening to impose tariffs on imports from countries that export a lot to it, such as China, Mexico, and Canada, causing global concern. Among these, Chinese goods entering the US will face a 10% tax rate, effective from February 4, 2025. In response, China announced it would impose a 15% tariff on LNG and coal from the US and 10% on products like crude oil, cars, and agricultural equipment, effective from February 10, 2025.
Meanwhile, Vietnam is a highly open economy, and the US, China, and the European Union (EU) are all of its important trade partners. Therefore, a trade war could present both opportunities and challenges for Vietnam. The opportunities will come in the potential shift in supply chains, where Vietnamese businesses could benefit from the trend of supply chains moving out of China (China+1).
Moreover, the export of some goods such as textiles, electronics, and agricultural products could increase if Vietnam effectively takes advantage of free trade agreements (EVFTA, CPTPP, etc.). We could also attract more foreign direct investment (FDI) as companies seek more stable production environments. Logistics companies will also have the opportunity to grow as many businesses look to relocate production to countries with tariff advantages, boosting demand for transportation, storage, and logistics services.
However, the challenges are significant. Exports could be impacted if global consumer demand decreases due to the trade war. We also face the risk of facing tariffs or trade defence measures from the US or the EU if Vietnam is seen as a transhipment point for Chinese goods.
Another major challenge is enhancing institutional capacity. If we only attract investments in low-value-added assembly or processing sectors, we may face issues such as product origin fraud to evade taxes under increasingly stringent trade defence measures. These factors could cause the economy to miss breakthrough opportunities and fall behind. Lastly, the Vietnamese dong may come under pressure from exchange rate fluctuations due to shifting investment flows.
Reporter: Given these intertwined challenges and opportunities, does the GSO have any recommendations or solutions for Vietnam to maximise opportunities and minimise risks?
GSO General Director Nguyen Thu Huong: In light of both domestic and international conditions, our country needs to respond quickly and proactively, not passively, to avoid missing opportunities while maintaining momentum and drive for continued development. To respond to the new context, especially in the event of a potential global trade war, while focusing on economic development to meet growth targets for 2025, the GSO proposes several recommendations and solutions.
Firstly, it is necessary to coordinate policies harmoniously and effective, including promptly managing the monetary policy to support business production and drive growth momentum.
The authorities must update forecasts for growth and inflation for timely response, ensuring economic stability and growth. The developments in global commodity prices, international and regional conditions must be closely monitored, and timely forecasating of risks impacting domestic price levels are essential. The lists of goods subject to tariffs by both the US and China, as well as exchange rate trends for USD, CNY, and other key currencies like EUR and JPY, must be updated to ensure a timely response.
Second, it is crucial to accelerate industrial production development. Policies must be innovated to attract investment into industrial sectors and focus on developing high-quality human resources. This is essential to meet the demand of industrial production in the new context, particularly ensuring the supply of skilled and high-tech workers for the high-tech and advanced manufacturing industries.
Third, it is necessary to promote exports, strengthen trade promotion, diversify supply and production chains, as well as export and import markets. This must be tied to enhancing product quality. Vietnam should also engage more deeply in regional and global supply chains. Specifically, we should fully leverage the opportunities presented by the 17 free trade agreements (FTAs) signed. Policies supporting export promotion to major markets and strengthening access to new, promising markets such as the Middle East, Halal, Latin America, and Africa are key.
Fourth, strong, decisive, and timely solutions are required to accelerate the disbursement of public investment from the beginning of 2025, especially for important national projects, key works, and national target programmes. Competitive and preferential policies and a favourable business environment for attracting large, national-level and high-tech projects will help attract multinational corporations to invest, establish headquarters, and set up R&D centres in Vietnam.
Thank you very much!
