A Race to the Top: Targeting 6.5-7% Growth in Q3 to Sustain Vietnam’s Momentum in 2025 and Beyond.

On the morning of July 6, Prime Minister Pham Minh Chinh chaired the regular Government meeting for June 2024 and the Government’s online conference with localities.

The meeting was attended by Politburo members, Secretariat members of the Party Central Committee, Central Committee members, Deputy Prime Ministers, Government members, heads of ministries, agencies and bodies under the Government, Mr. Dinh Van An, Assistant to the General Secretary, leaders of the Central Economic Committee, the Finance-Budget Committee, the Economic Committee of the National Assembly, the Office of the National Assembly, central agencies, leaders of provinces and centrally-run cities, and representatives of some corporations and state-owned groups.

The meeting focused on evaluating the socio-economic situation in June and the first six months of the year, the allocation and disbursement of public investment capital, the implementation of three national target programs, and key tasks and solutions for the last six months of the year.

Strong GDP growth in the second quarter, exceeding the scenario

Regarding the direction and administration, the reports and opinions at the meeting agreed that

, since the beginning of the year, the Government and the Prime Minister have focused on directing the levels, sectors, and localities to resolutely and synchronously implement the resolutions of the 13th Party Congress, the conclusions and resolutions of the Central Committee, the Politburo, the Party Secretariat, the National Assembly, and the Government, as well as the directions of the Prime Minister, in the spirit of the 2024 theme: “Discipline, responsibility, proactive and responsive, accelerate and innovate, effective and sustainable”.

In this regard, efforts have been made to build and perfect the institutional system, with the organization of five Government meetings on law building. The Government and the Prime Minister have issued 75 decrees, 136 resolutions, 653 decisions, and 19 directives.

Thorough preparations have been made to serve the 9th Plenum of the Central Committee and the 7th session of the National Assembly (with 80 submissions and 70 reports. The National Assembly passed 11 laws, 21 resolutions, and gave opinions on 11 draft laws). Many important meetings and conferences have been held with businesses, experts, and scientists, focusing on reviewing and perfecting legal regulations, mechanisms, and policies to remove difficulties and create favorable conditions for people and businesses. The Government leaders have had more than 40 working sessions with localities, directly inspecting and urging many key infrastructure projects.

Basically completed the approval of planning schemes, implementing 110/111 planning schemes: 90 planning schemes have been approved, 02 planning schemes are being submitted for approval, 17 planning schemes have been appraised and are being completed, 01 planning scheme is being appraised, including the issuance of 06 regional planning schemes and the Plan for implementing the Power Planning 8.

Promote the disbursement of public investment capital, especially for important national projects with the spirit of “overcoming the sun, winning the rain”, “eating and sleeping urgently”, “working in three shifts and four groups”, “working on holidays, holidays, and Tet”, “only discussing how to do it, not discussing how to retreat”…

Timely issuance of many mechanisms and policies suitable to the situation and practical requirements, especially to promote growth, control inflation, manage the gold and gasoline markets, reduce interest rates, increase access to credit, exempt, reduce, extend and postpone taxes, fees, charges, and land rent…

Focus on effectively implementing the activities of the Socio-Economic Sub-Committee serving the 14th National Party Congress.

Regarding the results achieved, the reports and opinions emphasized 11 outstanding results.

First, GDP growth in the second quarter recovered strongly, reaching 6.93%, averaging 6.42% in the first six months, much higher than the same period in 2023 (3.84%) and exceeding the scenario in Resolution 01 (5.5-6%).

All three sectors grew well, with agriculture up 3.38%, industry and construction up 7.51%, and services up 6.64%. The Purchasing Managers’ Index (PMI) in June reached 54.7 points (the highest in ASEAN).

The economic structure continued to shift positively: Agriculture accounted for only 11.55%, industry and construction 36.44%, services 43.35%, and tax minus product subsidies 8.66%.

Second, the macro-economy continued to be stable, inflation was controlled, and the major balances were ensured.

The Consumer Price Index (CPI) in June increased by 0.17% compared to May, averaging 4.08% in the first six months (core inflation increased by 2.75%).

Credit growth reached about 6%, the exchange rate was actively and flexibly managed and remained relatively stable, and the gap between domestic and international gold prices narrowed to about VND 4-5 million/tael.

Energy security and food security were ensured (rice export reached over 4.6 million tons, with a turnover of nearly US$3 billion, up 10.4% and 32% respectively compared to the same period), and the balance of labor supply and demand was basically ensured.

Third, exports continued to increase strongly, with large trade surplus, contributing to ensuring the balance of payments. Exports in June increased by 2.6% compared to May and 10.5% over the same period. Total exports in the first six months increased by 14.5% (the domestic sector increased by 20.6%, the FDI sector increased by 13.9%), imports increased by 17%, and trade surplus reached US$11.63 billion.

Fourth, the service and tourism sectors recovered quickly. Total retail sales of goods and service revenue in June increased by 1.1% compared to May and 9.1% over the same period, averaging 8.6% in the first six months. The number of international visitors in June reached over 1.2 million, up 28.1%, averaging 8.8 million in the first six months, up 58.4% over the same period in 2023 and 4.1% over the same period in 2019 (before COVID-19).

Fifth, the state budget situation continued to improve markedly. Total state budget revenue in the first six months reached 60% of the estimate for the year, up 15.7% over the same period. Public debt, government debt, national foreign debt, and state budget overspending were well controlled, much lower than the prescribed limits.

At the same time, in the first six months of the year, VND 47.3 thousand billion of taxes, fees, charges, and land rent were exempted, reduced, and extended, and it is expected that the total amount of tax, fee, and rent exemption, reduction, and extension for the whole year of 2024 will be about VND 191 thousand billion.

Sixth, investment development continued to achieve positive results, creating a driving force for economic growth. Total social investment in the second quarter increased by 7.5%, averaging 6.8% in the first six months, of which state investment increased by 4.8%, non-state investment increased by 6.7%, and FDI investment increased by 10.3%. The disbursement of public investment capital reached 29.39% of the plan. FDI attraction in the first six months reached US$15.19 billion, up 13.1%, and FDI realization reached US$10.84 billion, up 8.2% (the highest in the past five years).

Seventh, business development continued to grow. In June, there were 15,700 newly established enterprises, up 19.1% compared to May, averaging 80,500 in the first six months, up 6.1%, and 39,100 businesses resumed operations, up 3.9% over the same period.

According to a survey of business trends in the processing and manufacturing industry, 43.9% of enterprises assessed that their business situation in the third quarter would be stable and better than in the second quarter of 2024, 82.9% of enterprises assessed that their orders in the third quarter would be stable and higher than in the second quarter of 2024, and 83.7% of enterprises assessed that their export orders in the third quarter would be stable and higher than in the second quarter of 2024.

Eighth, culture, society, and social security were paid attention to, and people’s lives were improved.

In the second quarter, 95.1% of households assessed that their income was stable or higher than in the same period. The average income of laborers in the first six months reached VND 7.5 million/month, up 7.4% over the same period.

From the beginning of the year to now, 21,300 tons of rice have been provided for hunger eradication, and more than 26.2 million health insurance cards have been issued free of charge. 78% of communes have achieved new rural standards. Cultural, festival, and sports activities were held in a joyful, safe, and healthy manner.

Ninth, administrative reform has been focused on, especially the reduction and simplification of administrative procedures, the prevention and combat of corruption and negativity have been promoted, and many economic and corruption cases have been prosecuted and tried, contributing to consolidating people’s trust.

Tenth, politics and society were stable, national defense and security were strengthened, and foreign affairs and international integration were promoted. Many important external activities of Party and State leaders were successfully organized, economic diplomacy was promoted, and the country’s prestige and position continued to be enhanced.

Eleven, promote revenue increase, cost savings, and public investment restructuring to have about VND 700,000 billion to implement the roadmap for salary increase from July 1, 2024, suitable to the situation and conditions, and be agreed upon by public opinion and those who enjoy the salary increase.

Many international organizations and experts continued to highly appreciate the results and prospects of the Vietnamese economy. ADB, Standard Chartered, and HSBC forecast Vietnam’s GDP growth in 2024 to be around 6%. IMF assessed Vietnam as the only Southeast Asian representative in the top 10 with a growth forecast of 6.4% in the period of 2024-2029. The business environment ranking increased by 12 places, the Global Innovation Index ranking increased by 2 places, the Human Development Index (HDI) increased by 8 places, and the Happiness Index in 2024 increased by 11 places…