According to the forecast of most global economic research organizations, the global economy in 2024 still faces many challenges and instabilities. In addition to geopolitical tensions, climate change and natural disasters have made the global economic landscape brighter, but still not fully recovered from the COVID-19 pandemic.
The Asian Development Outlook (ADO) report by the Asian Development Bank (ADB) identifies the main factors affecting the economy as the global economic recession, tightening of monetary policy in some developed countries, and disruptions and supply chain disruptions due to increased geopolitical tensions.
According to the assessment of Mr. Shantanu Chakraborty, Country Director of ADB in Vietnam, despite the difficulties and challenges, in the year of 2024 – the Year of the Dragon, the Vietnamese economy will still be resilient and expected to recover well in the near future thanks to strong domestic consumption, supported by moderate inflation, accelerated public investment, and improved trade activities.
Drivers of growth
Vietnam targets economic growth of 6-6.5% in 2024. Meanwhile, the Asian Development Bank predicts Vietnam’s growth at 6%, and the World Bank (WB) forecasts a growth rate of 5.5% for Vietnam. To achieve these goals, Vietnam will continue to rely on public investment as the driver of growth.
According to a report from the Ministry of Finance, estimated until the end of January 31, 2024 (the deadline for disbursement of investment capital for 2023), the disbursement of investment capital nationwide reached 662,588.2 billion VND, achieving 82.47% of the plan and 93.12% of the Government’s plan (711,559.8 billion VND).
Based on the resolution of the National Assembly, the Prime Minister allocated 657,349 billion VND of planned public investment capital for 2024 from the state budget to ministries, sectors, and localities. The plan for local budget balancing in 2024 increased by 31,147 billion VND. The total plan for public investment capital in 2024 (including the Government’s plan, increased local budget balancing plan) is 688,496 billion VND.
A report sent to the Prime Minister by the Ministry of Finance shows that the disbursement from the beginning of the year to January 31, 2024, was 16,934.3 billion VND, equal to 2.46% of the plan and 2.58% of the Government’s plan.
Along with public investment, the tourism and services sector is expected to continue expanding, supported by the recovery of tourism and related services. The New York Times borrowed a cable car system image to talk about the tourism economy.
According to expert Steven Dale, Vietnam is suitable for cable car construction due to its many mountains, forests, and islands. This is considered a “road” with faster construction time, lower cost, and less environmental damage compared to roads. According to statistics from cable car manufacturers, over the past two decades, about 26 cable car routes have been built in dozens of locations across the country, demonstrating the rapid development of infrastructure to serve tourism demand.
“Vietnam is home to the 4 longest cable car routes in the world, all built in the past decade, showing the strong transformation of Vietnam’s economy and tourism industry,” the New York Times emphasized.
In the general difficult situation of the economy, the service sector, including tourism, contributes significantly to the country’s economic growth. High-level tourism development from late April 2023 onwards has stimulated increased consumption demand, which in turn has strongly spread to the production of other service sectors such as transportation, accommodation, food and beverage, travel, artistic activities, entertainment… Positive factors in economic growth.
In 2023, the total number of international tourists reached an estimated 12.6 million, exceeding the target set at the beginning of the year (8 million) and achieving the adjusted target (12.5 – 13 million) for the year. Domestic tourists are estimated to reach 108.2 million, exceeding the plan by 6.0%. Total tourism revenue is estimated at 678.3 trillion VND, exceeding the plan for 2023 by 4.35%.
The National Tourism Administration of Vietnam aims to welcome 17-18 million international visitors in 2024, fully recovering from the Covid-19 pandemic (2019). According to the latest data from the National Tourism Administration of Vietnam, the number of international visitors to Vietnam in January 2024 reached over 1.5 million, up 10.3% compared to the previous month and up 73.6% compared to the same period in 2023.
In addition, foreign direct investment (FDI) is also a factor driving Vietnam’s economy forward. In 2023, the actual capital of foreign investment projects reached about 23.18 billion USD, up 3.5% compared to 2022, setting a record disbursement level so far in the context of global trade and investment contraction. Vietnam’s business environment ranking also increased by 12 steps globally.
As of January 20, the whole country had 39,377 foreign investment projects still in effect with a total registered capital of nearly 471.9 billion USD. The accumulated disbursement of foreign investment projects is estimated at nearly $298.66 billion, equal to nearly 63.3% of the total registered investment capital still in effect.
