Deputy Minister of Planning and Investment Tran Quoc Phuong shares expectations for economic growth in the last six months – Photo: VGP/Nhat Bac
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Advising on a new scenario with GDP growth reaching 6.5 – 7% for the whole year
The Deputy Minister informed that the GDP growth result in the first six months of 2024 was very positive, especially in the second quarter. This was a breakthrough growth, creating a fairly good foundation to meet the requirements of Resolution 01 of the Government and also in line with the goal of Resolution 01, which is to prioritize promoting growth on the basis of maintaining macro-economy.
Therefore, in the report submitted to the Government, the MPI has researched and developed two scenario options to serve the direction and administration in the last months of the year.
First, with the baseline scenario, which is the scenario closely following the target set by the National Assembly of 6 – 6.5%. “If we take the upper limit of 6.5%, the growth in the third and fourth quarters also only needs to grow by about 6.5%, which is completely feasible because these are the dynamic quarters of the year. We have every reason to expect better results, surpassing the target set by the National Assembly,” Mr. Phuong said.
Therefore, the MPI has also calculated, advised, and reported to the Government a higher option, which is the scenario for the whole year to reach 7%. According to this option, the third and fourth quarters will grow by about 7.4 – 7.6%. He emphasized that although above 7% is a high level, it is completely possible to strive for.
“We reported to the Government to choose the new scenario option, updating Resolution 01, with growth for the whole year at about 6.5 – 7%. In which, the MPI boldly proposed to the Government to set a higher target of 7% to have more drastic directions towards this goal,” said Mr. Phuong.
According to the Deputy Minister, there are six contents and factors that positively affect GDP growth in the last six months of the year:
First is the positive growth trend of the region and the world.
Second is the driving force for investment, including investment from the non-state sector, especially FDI, which is growing positively.
Third, the driving forces for export have recovered, and the proportion of enterprises with export orders has increased rapidly. This is very good news, but there are still difficulties in exporting such as increased transportation costs or having to change sea transport routes.
Fourth, tourism has recovered quite strongly. At present, the number of international tourists to Vietnam has increased, and it is completely possible to aim for 14 – 15 million tourist arrivals this year. This is a very positive factor that can affect the service sector.
Fifth, the National Assembly has passed the effect of three very important laws: the Land Law, the Real Estate Business Law, and the Housing Business Law. These three laws will have a great impact on the real estate market, which has faced many difficulties in the first six months. With the new, more relaxed, and facilitating regulations, the real estate market will show positive signs in the last six months, positively affecting economic growth.
The sixth factor is the direction and administration. At present, the Government’s direction is very strong, and it requires ministries, branches, and localities, especially the four localities that are the driving force for economic growth, to be more drastic in promoting the growth target.
Three factors maintain a positive trend in FDI attraction
In terms of FDI attraction, up to now, the total result in the first six months of the year has been quite good. The total registered FDI in the first six months reached nearly 15.2 billion USD, up 13.1%. Of which, new FDI registration was over 9.5 billion USD, up 46.9%. This is a notable figure because new registration means new projects that will increase the production and business capacity of the economy.
FDI implementation capital reached about 10.8 billion USD, up 8.2%, which is also a high growth rate. There are also many large-scale new projects to be invested in.
“Regarding the expectation for the last six months of the year, at present, in the report of the MPI, we are very optimistic, not only from the subjective assessment of domestic agencies but also from the assessment of foreign agencies,” said Mr. Phuong.
The assessment of financial organizations at home and abroad about the prospects for FDI attraction shows that the positive trend will still be maintained thanks to three very important factors:
First, the adaptation diversification strategy of investors. This trend has been implemented after COVID-19, and this is also an opportunity for Vietnam to welcome investment capital from the world.
Second, Vietnam’s economic growth in the first quarter shows many prospects, which is a good factor for investment impact.
Third, Vietnam’s macro-economy is stable, although it is facing many difficulties, especially difficulties from outside related to the issue of prices of some strategic commodities in the world market.
Vietnam’s FDI index is still at about 4% within the target range set by the National Assembly. The inflation index is at over 2%, showing that the macro-economy is stable. This is an important factor that investors need to ensure their investment.
The MPI’s survey found that foreign investors’ confidence in Vietnam’s economy remains very positive, reflecting their desire to continue investing in Vietnam. Through this, Vietnam can expect to attract FDI capital in the whole year of 2024 to reach about 39 – 40 billion USD, equivalent to or slightly higher than the same period in 2023.
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