The Economy’s Growth Script: Unveiling the Intriguing Narrative

Vietnam’s gross domestic product (GDP) grew by 6.93% in the second quarter, pushing the GDP growth for the first half of the year to 6.42% compared to the same period last year. This figure even surpasses the highest growth scenario of 6.5% for the entire year set by the National Assembly.

Deputy Minister of Planning and Investment Tran Quoc Phuong assessed that based on the growth results in the first six months, the growth target of 6.5% for this year is entirely achievable. The Ministry of Planning and Investment has developed and proposed two scenario plans to the Government. With the baseline scenario closely following the National Assembly’s goal, a 6.5% growth rate is well within reach.

“Usually, the third and fourth quarters are considered the most dynamic quarters of the year, so there is a strong basis to expect higher growth than the 6.5% target, surpassing the National Assembly’s goal,” said Deputy Minister Tran Quoc Phuong. The Ministry has reported to the Government a higher scenario with an expected annual growth rate of 7%. Accordingly, GDP growth in the third and fourth quarters must reach 7.4-7.6%.

The leadership of the Ministry of Planning and Investment believes that there are six factors that will positively impact growth in the remaining months of the year. Firstly, there is a positive growth trend in the region and the world. Dynamics in investment attraction, including investment from the non-state sector, especially foreign direct investment (FDI), are all on an upward trajectory.

Export dynamics have recovered, with a rapid increase in the number of enterprises receiving export orders. “This is a very encouraging sign. However, businesses still face challenges such as increased transportation costs or the need to reroute maritime transportation,” said the leader of the Ministry of Planning and Investment.

In addition to exports, tourism has also witnessed a strong recovery. Vietnam is well on its way to welcoming approximately 14-15 million visitors this year. This is a positive factor that will significantly impact the service sector.

Notably, the National Assembly has passed three essential laws: the Land Law, the Real Estate Business Law, and the Housing Law. These laws will significantly influence the real estate market, which is currently facing difficulties. With the new, more relaxed regulations, the real estate market is expected to show positive signs in the last six months, positively impacting economic growth.

In terms of governance, the Government has been very determined and has requested ministries, sectors, and localities, especially the four key economic growth drivers, to be more proactive in promoting growth objectives.

Despite many positive indicators supporting high growth targets, a 7% growth rate for the entire year remains outside many previous forecast scenarios.

The Central Institute for Economic Management (CIEM) has proposed three growth forecast scenarios for 2024, at 5.5%, 6%, and 6.5%, respectively.

Dr. Nguyen Huu Tho, representing the CIEM research team, noted that among the growth drivers, traditional growth locomotives like Ho Chi Minh City and Hanoi are slowing down, while new growth centers like Hai Phong, Quang Ninh, and Thanh Hoa are emerging. However, these new drivers are still few and not strong enough.

To achieve high growth in 2024, the CIEM research team suggested that the Government focus on macroeconomic stability, inflation control, and giving more attention to economic growth drivers. They also proposed continuing to improve the institutional and business environment, developing infrastructure for production, providing more support to production and business entities, and promoting the development of the goods and services market.

Meanwhile, the team led by Dr. Can Van Luc and the BIDV Training and Research Institute considered a positive scenario with a growth rate of 6.5-7%. This outcome can be achieved if the international and domestic environments are favorable, external risks are well anticipated and managed, traditional and new growth drivers are effectively utilized, macroeconomic stability is maintained, and the confidence of businesses and people is strengthened.