Bright spots of Vietnam’s economy in 2023
Economic growth of Vietnam through the quarters in 2023
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Since Q4/2022, the instability of the global economy, the major economies falling into recession, rising inflation, the US government and many countries have had to implement “tight monetary policies” …, have affected Vietnam’s economy. Despite many challenges, Vietnam’s economy has made efforts to overcome the “headwinds” with many bright spots.
First, the growth is still a “bright spot” in the region and the world. The economic context in 2023 has complex developments, continuous growth forecasts have to be adjusted to match the reality, and finally, the growth rate has reached 5.05%. Although it did not reach the target, this is still an impressive number and a bright spot of the economy. Vietnam has become a country with outstanding growth rates in the region and the world in 2023 (1.68 times the world average).
Notably, the growth rate of each quarter is always higher than the previous quarter: Q1 growth rate is only 3.41%, Q2 is 4.25%, Q3 is 5.47% and Q4 is 6.72%. This is a bright spot showing the resilience of the economy in overcoming the “headwinds”.
 In 2023, agricultural products achieved remarkable growth, such as: Rice reached $4.78 billion, up 38.4%; fruits and vegetables reached $5.69 billion, up 69.3%; and durian reached $2.3 billion – Photo: VGP |
Second, agriculture has stable growth and continues to be a “bright spot” of the economy. The agricultural sector in 2023 achieved high growth of 3.83% (target 3-3.5%), contributing 8.84% to the total value added of the economy, maintaining its role as the “backbone” and the “mainstay” of the economy.
Total export turnover reached $53.01 billion, with a trade surplus of $12.07 billion, up 43.7% compared to the same period last year.
It can be said that the agricultural sector in 2023 is still a prominent “bright spot” of the economy.
 The service sector increased by 6.82%, contributing 62.29% of the country’s GDP
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Third, the service sector continues to contribute significantly to GDP, with tourism emerging as a “bright spot” of the economy in 2023.
According to the General Statistics Office, in 2023, the service sector grew by 6.82%, contributing 62.29% to the country’s GDP. This is a lower growth rate compared to the same period in 2022 (9.99%), but its contribution to GDP is higher than in 2022 (56.65%).
Notably, there was a significant increase in the tourism industry in 2023, with the number of international tourists visiting Vietnam reaching 12.6 million, up 3.4 times compared to 2022 and surpassing the target set at the beginning of the year (8 million). The revenue from package tourism is estimated at VND 37.8 trillion, up 52.5% compared to the same period last year.
It can be said that in 2023, Vietnamese tourism has regained its strength and become a “bright spot” of the economy.
In 2023, Vietnam had 35 commodities with export turnover exceeding $1 billion (accounting for 93.6% of the total export turnover), including 7 commodities with export turnover exceeding $10 billion
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Fourth, the export sector in 2023 has many positive developments. Although the economic growth momentum comes from import and export, which is mainly affected by the world market, but Vietnam’s export turnover has gradually improved, especially in the later months of the year.
If in the first 9 months, Vietnam’s export turnover decreased by 8.2% compared to the same period last year, then in Q4/2023, the export turnover is estimated at $96.5 billion, up 8.8% compared to the same period last year and up 3.2% compared to Q3/2023. Overall in 2023, the goods export turnover is estimated at $355.5 billion, down 4.4% compared to the same period in 2022, and the decline in exports of the economy has improved. The leading export sectors in many localities nationwide in the later months of the year all show optimistic signals.
The trade surplus reached $28 billion, far exceeding 2022 ($11.2 billion). This is the 8th year that Vietnam has maintained a trade surplus, with a higher surplus in the following year.
 Vietnam’s FDI attraction continues to increase positively |
Fifth, attracting foreign investment continues to increase, and Vietnam is an attractive destination for foreign investors.
As of December 20, 2023, the total registered FDI capital reached nearly $36.6 billion, up 32.1% compared to the same period last year; actual FDI capital is estimated at $23.18 billion.
With 3,188 projects licensed, the registered capital reached $20.19 billion, of which the manufacturing industry has the highest newly licensed capital with a registered capital of $15.85 billion, accounting for 78.5% of the total newly registered capital. This shows that foreign investors highly value the investment potential in the industrial sectors of Vietnam.
Sixth, transportation infrastructure development and regional and interregional connectivity have made new progress.
Firmly pursuing the goal of ensuring that technical infrastructure must be ahead, creating breakthroughs for socio-economic development, in 2023, the government has strongly directed and increased disbursement of public investment, ensuring the progress of implementing transportation projects. A notable achievement is that on December 24, 2023, the inauguration and operation of four transportation projects took place for the first time: Expansion project of Dien Bien Airport; Tuyen Quang – Phu Tho expressway project; My Thuan – Can Tho expressway project under the Eastern North-South expressway project; My Thuan 2 bridge project across the Tien River.
The simultaneous inauguration of four projects with a total investment capital of nearly 18,000 billion VND is a “historic milestone,” creating new resources and momentum for socio-economic development of localities and the whole country.
Seventh, macroeconomic stability, reasonable inflation control, ensuring the balance of the economy, creating conditions for creative development.
Despite major fluctuations from the global market, political instability, regional conflicts, and domestic difficulties, the government has managed the economy, ensuring stability and development.
The inflation control target has achieved good results, with the inflation rate below the target for 2023 (CPI average for 2023 increased by 3.25% compared to the same period/target for 2023: 4.5%).
The disbursement of public investment has shown many positive changes, with a higher growth rate in the later quarters, contributing to stimulating economic growth and consolidating the internal strength of the economy. The public debt management indicators have continued to be maintained and improved.
The total state budget revenue accumulated in 2023 reached 106% of the year’s estimate, although it decreased by 5.4% compared to the same period last year, it still reflects the efforts of the entire economy.
Vietnam’s foreign exchange reserves in 2023 tend to increase (after the central bank sold about 20% of the total foreign exchange reserves to stabilize the exchange rate), by May 2023, according to VnDirect and IMF, Vietnam’s foreign exchange reserves could reach about $93-95 billion.
Economic growth momentum of Vietnam in 2024
Based on these foundations, in 2024, Vietnam has set a target to achieve a domestic product growth rate of 6-6.5%. However, economic growth is forecasted to face many difficulties, in the context of the global economic recovery “gradually warming up” from the last months of 2023, but not yet firmly and uncertainties may arise.
Identifying and promoting growth momentum is extremely important to manage and develop the economy in 2024.
First, the stability and deepening development of the agricultural sector continue to be an advantage and an important pillar contributing to the economic growth in 2024. Exploiting competitive advantages and innovative product capacity, capturing the market will help the agricultural sector continue to contribute to the export turnover of the economy.
Second, the recovery of the industrial sector is an important factor, not only contributing to growth but also promoting import and export growth in 2024. The efforts of the industrial enterprises, the gradual recovery of the international market, allow the forecasted growth rate of the industrial sector to gradually recover and develop in 2024.
Third, the decline in trade in 2023 is forecasted to recover in 2024. Recovery signals have appeared since Q3, especially in the later months of 2023, which will boost the export front in 2024 and continue to be an important driving force for the GDP growth of the economy in 2024.
Fourth, the service sector contributes greatly to the GDP growth of the economy and has maintained a relatively high growth rate in 2023. The warming up of the real estate market in 2024 will help “activate” many industries and contribute to economic growth. Tourism has resurged in 2023, and if there are positive policies, it will continue to increase in 2024 and be a driver of economic growth.
Therefore, from the perspective of total supply, the growth potential of 2024 has optimistic signals, in which the strong momentum of 2024 will be the recovery of industrial production, the contribution of export activities, and the warming up of the real estate market.
Fifth, from the perspective of total demand, the increase in domestic consumption will contribute significantly to the growth in 2024. Macro policies that have been implemented since 2023, such as reducing VAT, supporting consumers through fee reductions, and fees need to continue to be implemented in 2024, and the VAT reduction rate may even be increased from 3 – 5%; the progress of wage reform, efforts to reduce the price of goods and services from businesses, promotion of shopping, domestic tourism spending… will contribute to increasing domestic purchasing power that has been reduced since the COVID-19 pandemic.
Sixth, government spending in 2024, especially public investment, is still an important driving force to stimulate growth towards total demand and increase the internal strength of the economy. To promote the disbursement of public investment, the “bottlenecks” in financial procedures, flexible and fast cooperation between ministries, localities, and investors… need to be strengthened in 2024.
Seventh, the decline in private investment in 2023 needs to be strongly restored and supported by measures to assist businesses in restructuring their industries, products, reducing production costs, expanding market outlets, encouraging investment in green and digital economies, innovation… The warming up of private investment will be a very important factor to promote economic growth in 2024 and the following years.
Eighth, new momentum from economic diplomacy will be an important breakthrough for Vietnam in 2024. Major diplomatic events at the end of 2023, namely the upgrading of the Comprehensive Strategic Partnership between Vietnam and the US and between Vietnam and Japan, have opened up new opportunities for Vietnam to expand international economic relations.
In 2024, the US economy continues to maintain its growth momentum based on the domestic market, public investment, and the development of new economic sectors such as artificial intelligence, biotechnology, and clean energy, renewable energy.
In particular, major US corporations such as Intel, Apple, Google, Walmart, Boeing, etc. are studying investment expansion in the supply chain in Vietnam. These large US companies are particularly interested in exploring Vietnam’s potential in the semiconductor industry, clean energy conversion, high-quality workforce training.
In 2023, the total import-export turnover between Vietnam and the US reached nearly $111 billion, continuing to maintain the largest export surplus market for Vietnam. In 2024, with the continued warming and increased purchasing power in the US domestic market, there will be great opportunities for Vietnam’s exports, especially agricultural and processing industries.
It can be said that the economic relations between Vietnam and the US and other countries are not only the driving force for economic growth but will be a new “impetus” for the development of Vietnam’s economy in 2024 and the following years.
Associate Professor Dr. Nguyen Chi Hai – Former Dean of the Faculty of Economics, University of Economics and Law, VNU-HCMC
