Striving for 6.5% – 7% GDP Growth in Q3

On July 6-7, Prime Minister Pham Minh Chinh chaired the regular Government meeting for June 2024 and the Government’s online conference with localities.

Many Positive Signs

Reporting at the meeting, Minister of Planning and Investment Nguyen Chi Dung said that the country’s economy has recovered and achieved important results, which have been highly appreciated by international organizations and enterprises. Specifically, GDP growth in the second quarter reached 6.93% year-on-year, and 6-month growth reached 6.42%, exceeding the upper bound scenario in Resolution No. 01/NQ-CP (6.0%).

According to Minister Nguyen Chi Dung, if the growth momentum continues to be maintained and further promoted, the growth rate in 2024 is likely to reach or even exceed the upper bound of the National Assembly’s target of 6.5%. In the past six months, the growth drivers from the supply side have continued to improve positively. The agriculture, forestry, aquaculture, and services sectors maintained a fairly good growth rate. The industry and construction sector recovered quickly, leading the growth momentum. The added value of the industry in the second quarter increased by 8.55%, and in the first six months, it increased by 7.54%. At the same time, the growth drivers from the demand side have also recovered positively. Social investment capital in the first six months increased by 6.8%, of which private investment increased by 6.7%. According to the Minister, the total registered FDI capital in the first six months reached nearly US$15.2 billion, up 13.1%. Many large-scale FDI projects in the fields of semiconductors, electronics, and energy have been newly invested and expanded with increased capital.

At the Hanoi bridge, Vice Chairman of the Hanoi People’s Committee Duong Duc Tuan said that the city’s GRDP in the first six months of 2024 increased by 6%, higher than the same period last year. Regarding public investment, Mr. Tuan said that by the end of June 2024, it reached VND 19.5 trillion (24%), lower than the average disbursement rate of the country. “The city has focused on expanding the traffic nodes in the inner districts, accelerating the progress of key projects, especially the Ring Road 4 – Capital Region project,” said Mr. Tuan. In the last six months of the year, the city will implement the Law on the Capital (amended) which has just been passed by the National Assembly. At the same time, accelerate the progress of important transport infrastructure projects, Ring Road 4 – Capital Region; put into operation and exploitation of the Nhon – Hanoi elevated railway project. At the same time, develop a master plan for investment in the construction of the capital’s urban railway system, striving to complete all urban railway routes by 2035, according to Decision 519 of the Prime Minister and Conclusion No. 49 dated February 28, 2023 of the Politburo.

Ho Chi Minh City’s socio-economic picture in the first six months has many bright spots. Speaking from Ho Chi Minh City’s bridge, Chairman of the Ho Chi Minh City People’s Committee Phan Van Mai said that the city’s GRDP in the first six months increased by 6.46%, total retail sales of goods and services increased by 8.8%, exports increased by 13.1%, industrial production index increased by 5.5%, and budget revenue reached 55.7% compared to the plan. According to Chairman Phan Van Mai, in the first months of the year, the city has focused on implementing key national projects. Especially, the mechanisms and policies under Resolution 98 of the National Assembly are being actively implemented by the city. Besides the bright spots, Mr. Phan Van Mai frankly admitted some limitations of Ho Chi Minh City: FDI attraction decreased, total registered capital of enterprises decreased, and disbursement of public investment capital was low, reaching only 14.3%.

Regarding tasks and orientations for the last six months of the year, Chairman Phan Van Mai emphasized that Ho Chi Minh City will focus on solutions to promote growth from investment and consumption drivers, striving for a growth rate of 7% – 7.5%. The city will link the strong reform of administrative procedures with removing obstacles and difficulties in production and business; urgently prepare to coordinate with ministries and sectors to complete the dossier for the Government to submit to the Politburo, and by the end of the year, submit it to the National Assembly for a resolution on urban railways, a resolution on Ring Road 4, and a resolution on the international financial center.

The Chairman of the Ho Chi Minh City People’s Committee proposed that the Government soon complete and issue decrees and help localities remove obstacles and difficulties; the Prime Minister soon approves the investment policy for the project of the Ho Chi Minh City – Moc Bai expressway; and the Can Gio international transit port project. He also suggested that the Ministry of Finance and the Ministry of Justice soon give opinions to complete the legal basis for the fourth loan package of the metro line 1 project.

Promoting Increased Supply in the Economy

Concluding the meeting, Prime Minister Pham Minh Chinh emphasized that in the coming time, in directing and managing, we need to pay attention to the fact that the third and fourth quarters are of particular importance to the year, and strive to achieve the highest results in 2024. According to the Prime Minister, the goal is to strive for a GDP growth rate of 6.5% – 7% in the third quarter, and then determine a suitable goal in the fourth quarter. Keep inflation below 4.5%, maintain macroeconomic stability, and ensure the major balances of the economy.

To achieve the above growth targets, the Government leader requested to renew the traditional growth drivers, including investment, exports, and consumption, and strongly promote new growth drivers such as digital transformation, sharing economy, chip semiconductors, and AI. The Prime Minister said it is necessary to promote increased supply in the economy, focusing on implementing solutions to develop all three sectors of industry, agriculture, and services. The Prime Minister noted industries and fields applying high technology, high added value, and large-scale projects with strong spillover effects to create a driving force for growth.

The Government leader requested a strong promotion of public investment disbursement, striving to reach 95% this year. For the amount of VND 29.9 trillion that has not been allocated so far, the Prime Minister directed a resolute adjustment. In terms of public investment, the Prime Minister requested that ministries, sectors, and localities focus on removing bottlenecks in site clearance to speed up the progress of key infrastructure projects. Along with that, well organize the 500-day emulation program to strive to complete projects to have a highway system from Cao Bang to Ca Mau to celebrate the 50th anniversary of the liberation of the South and the unification of the country and the 80th anniversary of the National Day (September 2).