Two GDP growth scenarios
At the regular Government press conference for June 2024, Deputy Minister of Planning and Investment Tran Quoc Phuong shared that the GDP growth results for Q2 and the first half of 2024 were very positive, especially in Q2, which was considered a breakthrough growth rate, creating a good foundation to meet the requirements of Resolution 01 of the Government. It also aligns with the Resolution’s goal of prioritizing growth promotion while maintaining macroeconomic stability.
According to Deputy Minister Phuong, with such positive results, the community and society have high expectations for an even better growth outcome by the end of 2024. Therefore, the Ministry of Planning and Investment has developed two scenarios to present to the Government to aid in their direction and administration for the remaining months.
Scenario 1: Achieve a year-over-year growth rate of 6.5% (closer to the target set by the National Assembly), with Q3 and Q4 growth rates of 6.5% and 6.6%, respectively (as per Resolution No. 01/NQ-CP).
Scenario 2: Attain a year-over-year growth rate of 7%, with Q3 and Q4 growth rates of 7.4% and 7.6%, respectively, surpassing the targets set in Resolution No. 01/NQ-CP by 0.7% and 0.6%.
“We have every reason to expect an outcome that surpasses the National Assembly’s goal of 6.5%. Hence, the Ministry of Planning and Investment has also calculated and advised the Government on a higher scenario, which is Scenario 2, with an expected annual growth rate of 7%,” emphasized the Deputy Minister.
Following this scenario, Q3 and Q4 would see growth rates of approximately 7.4% and 7.6%, respectively. Although achieving over 7% is ambitious, we are fully capable of striving for it as we work to overcome the limitations mentioned in the Ministry of Planning and Investment’s report to the Government at the regular June 2024 meeting.
Multiple factors driving growth
The Ministry of Planning and Investment reported to the Government a choice of scenarios, updating the Resolution 01 with a year-over-year growth rate of approximately 6.5% to 7%. The Ministry boldly proposed to the Government to aim for a higher target of over 7%, citing six influential factors to support this aspiration.
First, the positive growth trend in the region and the world, which we continuously monitor and update.
Second, investment momentum, including investment from the non-state sector and especially FDI, has been robust.
Third, export drivers have recovered, and the percentage of enterprises with export orders has increased rapidly. This is very encouraging news. However, we still face challenges in exports, such as increased transportation costs and the need to reroute maritime shipping lanes.
Fourth, tourism has rebounded strongly. International tourist arrivals to Vietnam have increased, and we are on track to surpass our six-month target of over 8 million visitors. We can now aim for over 10 million tourists this year, reaching 14-15 million. This factor can positively impact the service sector.
Fifth, the National Assembly has passed three critical laws: the Land Law, the Real Estate Business Law, and the Housing Law. These laws will significantly impact the real estate market, which faced many difficulties in the first half of the year. The new, more relaxed provisions will boost the real estate market in the second half, positively affecting economic growth.
Sixth, the Government’s strong leadership and direction. The Government’s guidance has been resolute, and it has urged ministries, sectors, and localities, especially the four key economic drivers, to be more proactive in promoting growth.
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