An overview of the mid-year macro-economic roundtable (Photo: VietnamPlus) Hanoi (VNA) – Recommendations to restore aggregate demand and promote economic growth in the new context were given by both domestic and foreign experts at the mid-year macro-economic roundtable in Hanoi on July 11.
Speaking at the event, Assoc. Prof., Dr. Nguyen Thanh Hieu, Vice President of the National Economics University (NEU), said that Vietnam reported a GDP growth rate of 3.72% in the first half of 2023, a relatively low rate compared to the same period of the last 10 years (only higher than the 1.74% in the same period of 2020 - due to serious impact of the COVID-19 pandemic). The disbursement of capital from the State budget was estimated at 232.2 trillion VND (9.8 billion USD), equivalent to 33% of the yearly plan, while the capital disbursed from the non-state sector increased by 2% year-on-year, lower than the 9.5% rise in the same period of 2022. Registered FDI in Vietnam reached 13.43 billion USD, down 4.3% year-on-year.
Regarding international trade, Hieu said that in the first half, Vietnam maintained a trade surplus of approximately 12.3 billion USD. However, export and import turnover decreased sharply over the same period, down 12% and 18%, respectively.
The expert attributed the decline to decreases in demand from Vietnam's main markets such as the US, the Association of Southeast Asian Nations (ASEAN), the European Union (EU) and some East Asian countries.
Hieu said that these figures demonstrated a sharp decline from the aggregate demand of the Vietnamese economy. It is difficult to reach the 6.5% growth target in 2023 in the context of unpredictable impacts from the world, and the domestic manufacturing sector yet to fully recover from the pandemic.
Vietnam maintains a trade surplus of approximately 12.3 billion USD. However, export and import turnover decrease sharply over the same period, down 12% and 18%, respectively. (Photo: VietnamPlus) This requires the Government, ministries, sectors and agencies to take prompt and appropriate measures to restore the aggregate demand and develop the economy in the next context, he stressed.
UNDP’s Senior Economist Jonathan Pincus suggested building a counter-cyclical fiscal policy to stimulate demand amidst slowing global growth.
Specifically, it is necessary to reverse the decline in public investment, increase its efficiency, modernise the social welfare system suitable for a middle-income country, and make the country’s fiscal policy transparent, he added.
Assoc. Prof., Dr. Pham The Anh from the NEU stressed the necessity to encourage private investment through continuously cutting down lending interest rates and using short-term investment tax credit.
It is essential to control money supply growth around 10%, Anh said, stressing the importance of accelerating public investment, with focus on infrastructure projects, developing social housing, and building new public schools to meet social needs.
The State should have policies to stimulate consumption through social welfare subsidies for poor households and people who have lost their jobs; and increase taxable income and reduce value-added tax (VAT) for essential items, the expert said.
An overview of the mid-year macro-economic roundtable (Photo: VietnamPlus) Deputy Director of the Department for National Economic Issues under the Ministry of Planning and Investment Tran Thanh Long said that his ministry has submitted to the Government a draft resolution on tasks and solutions to solve difficulties in production and business.
In the resolution, the ministry proposes focusing on removing difficulties for production and business; giving priority to promoting growth in association with ensuring macroeconomic stability; maintaining the implementation of measures and policies to stimulate consumer demand, develop the domestic market, strengthen the connection between supply and demand of goods and diversify export markets; and organising trade promotion activities to boost exports while effectively making most of signed free trade agreements (FTAs).
Attention should be paid to maintaining active and flexible monetary policies, promoting investment of the non-state economic sector and state-owned enterprises, attracting foreign direct investment (FDI) in association with the transfer of advanced technology, perfecting the socialist-oriented market economy institutions, accelerating administrative reform, improving the business investment environment, and tightening administrative discipline, added Long./.
