Vietnam overcomes challenges to achieve 2024 GDP growth target

Vietnam is taking measures to create an open business environment

Challenging target

The National Assembly has set a GDP growth target at a range of 6-6.5 percent for 2024. Economists consider this a significant challenge because the global economy is still characterized by unpredictable trends and uncertainties.

According to Nguyen Thi Huong, General Director of the General Statistics Office of Vietnam (GSO) under the Ministry of Planning and Investment, in 2024, the clarity of the global economic recovery remains uncertain. It is predicted that the potential risks from the global economic environment will still exist and continue to negatively impact the prospects of economic recovery and growth in Vietnam.

In the domestic context of intertwined opportunities and challenges, traditional driving forces remain weak while new motivations are not yet clear. Therefore, the Vietnamese economy still faces many difficulties and challenges in 2024. The impact of the global economic downturn, which has been compressed since the pandemic until now, is likely to continue affecting the Vietnamese economy, at least in the first half of 2024, before seeing more positive and optimistic signs.

Sharing this opinion, Nguyen Bich Lam, former General Director of the GSO, believes the global economic and political situation in 2024 will continue to be fast-changing, complex and unpredictable. There are various uncertain risk factors, political instability, extreme weather conditions causing serious repercussions on energy security, food supply, and disruptions in the production supply chain, leading to a decline in consumer demand. In 2024, the growth of the world’s leading economies, which are important trading partners of Vietnam, is expected to decrease compared to 2023.

Deputy Minister of Planning and Investment Tran Quoc Phuong also affirmed that the Vietnamese economy in 2024 faces more challenges than opportunities. One of the challenges is the potential for inflation due to the implementation of new wage policies in July 2024. Additionally, global energy price developments, especially oil prices, will impact Vietnam’s economic growth.

Growth motivations

Despite the challenges, economists also see the growth drivers for Vietnam in 2024. According to Nguyen Thi Huong, the growth drivers for the economy this year include the agro-forestry-fishery sector showing positive growth momentum; the effectiveness of the agricultural development strategy and the restructuring of crops to ensure food supply and agricultural development, as well as sustainable exploitation of seafood and aquaculture. The agricultural, forestry, and aquatic production are forecast to remain stable, and the increase in food prices will play a positive supporting role in economic growth.

Public investment needs acceleration

Deputy Minister Tran Quoc Phuong also pointed out the opportunities for the Vietnamese economy in 2024, including macroeconomic stability and valuable lessons learned from 2023. These factors will create opportunities for Vietnam to achieve its growth targets in 2024.

To achieve the growth target for 2024, Nguyen Bich Lam suggested that the Government urgently direct ministries, sectors, and localities to assess the existing shortcomings and challenges that are hindering the current growth drivers, especially in terms of institutional and legal frameworks. Solutions should be proposed to overcome these obstacles in order to maximize the strength and effectiveness of each growth driver for economic growth.

Vietnam also needs to build detailed growth scenarios based on the specific capabilities of each sector, industry and locality. It is important to mobilize resources and foster a sense of responsibility and accountability among the leaders of ministries, sectors and localities.

According to Nguyen Thi Huong, to achieve the GDP growth target in 2024, Vietnam needs to effectively implement its fiscal and monetary policies that support business access to credit capital, and those promoting public investment and helping resolve difficulties and obstacles in real estate, construction, tourism, and capital markets. Additionally, ministries, sectors and localities should expedite the progress of public investment projects and prioritize projects that are nearing completion. Potential projects should be put into use to maintain and expand production and business capacities. Along with reducing taxes and deferring tax payments, it is necessary to reduce fees and support businesses in seeking new markets. Vietnam should make effective use of existing free trade agreements (FTAs) and accelerate negotiations to sign new ones, and speed up administrative reforms to create an open business environment.

To achieve its growth targets, Vietnam needs to effectively implement domestic market trade promotion programs, enhance the distribution of goods through digital platforms and e-commerce to expand domestic consumption, and encourage Vietnamese people to buy Vietnamese products. There should be a focus on modernizing distribution systems in rural and mountainous areas. Furthermore, activities to stimulate domestic consumption should be implemented in localities with unique and advantageous products.