Today (October 15th), the Institute of Economics and Policy Research (VEPR) released its quarterly economic report for the third quarter, updating two growth scenarios for the fourth quarter and the whole year.
In the high-growth scenario, the fourth-quarter growth is expected to remain flat at 7.4%, with the full-year growth projected to reach the new target of 7% set by the government.
In the low-growth scenario, fourth-quarter growth is anticipated to be below 7%, with GDP fluctuating around 6.84%.
Forecasted and actual growth rates of Vietnam over the years, and VEPR’s two growth scenarios for 2024.
Summarizing the current economic landscape, Dr. Nguyen Quoc Viet, Vice President of VEPR, stated that GDP growth for the first nine months reached 6.82%, a 1.5-fold increase compared to the same period last year, mainly driven by the industry and services sectors. On the demand side, trade is recovering, and foreign direct investment (FDI) inflows serve as the primary growth drivers. Vietnam achieved a trade surplus of US$20.8 billion, a high figure during the 2020-2024 period.
Revenue collection exceeded plans, while public spending decreased compared to the same period in 2023, resulting in a continued budget surplus, providing room for fiscal policies such as tax exemptions, reductions, and extensions, especially as various sectors and fields suffered losses due to Typhoon Yagi.
The US dollar exchange rate at domestic commercial banks has continuously decreased. The growth rate of money supply and credit growth recovered quite well, positively contributing to promoting growth and investment, although it is still lower than the pre-COVID-19 average.
Dr. Nguyen Quoc Viet, Vice President of VEPR.
“The economy has many positive highlights, but there are still risks and challenges ahead,” said Dr. Viet.
According to Dr. Viet, the Purchasing Managers’ Index (PMI) declined, falling below 50 points in September. The ratio of withdrawing businesses to entering businesses remains high. Domestic consumption and public investment disbursement have not met expectations.
Economist Pham Chi Lan noted that third-quarter growth still relied on exports and the performance of FDI enterprises. For many years, domestic consumption and investment have not significantly contributed to growth.
Additionally, the business environment poses risks and challenges, with conditions for business operations and administrative procedures tending to increase due to weakened reform momentum from ministries and sectors. Data on the business sector reflects this situation, as the number of businesses withdrawing from the market has remained high over the past nine months, with 163,700 businesses ceasing operations, a significant increase since 2020.
