[Photo Story]: Multifaceted Perspectives on the Q1-2024 Economic Landscape
Many larger firms are currently experiencing extreme difficulties; however, smaller firms may be less affected. According to a few economic experts, communications media and government agencies should adopt a more objective perspective on the state of the economy in order to identify the best possible solutions.
The 1st Quarter 2024 Vietnam Economic Forum, themed “Economic Outlook in Q1 2024: Paving the Way for the Whole Year 2024”, co-organized by the Vietnam Economic Times and the Vietnam National University, Hanoi, School of Economics gathered respected economists, business leaders, and industry experts to share their perspectives on the economic landscape over the past three months.
Associate Professor Dr. Vu Thanh Huong, Vice Dean of the Faculty of International Business and Economics, University of Economics, Vietnam National University, Hanoi, believes that “economies dependent on supply chains and the Chinese market, including Vietnam, may face a decline in demand across various sectors from chemicals to electronics and machinery. Companies and countries will need to reassess their business strategies and supply chains.” According to Dr. Can Van Luc, BIDV’s Chief Economist and member of the National Monetary and Financial Policy Advisory Council, Vietnam’s economy is recovering in the first quarter, but it is crucial to acknowledge that this recovery is based on last year’s low growth rate. Specifically, the Q1 2023 growth rate stood at only 3.32%, which is considerably low. However, Dr. Luc highlights that growth drivers such as exports, investments, and consumption are showing positive signs of recovery this year.Dr. Nguyen Dinh Cung, former Director of the Central Institute for Economic Management, presented intriguing comparative figures. In Q1 2024, the number of Vietnamese businesses decreased by 14,000, averaging a monthly decline of 4,700. The increasing number of businesses exiting the market across most sectors clearly indicates that businesses and the economy are facing significant challenges. This situation raises concerns about the stability and growth momentum of businesses and the overall economy in the future.Dr. Pham Xuan Hoe, former Deputy Director of the Banking Strategy Institute, observes that money is flowing into the gold market. According to Dr. Hoe, gold will attract a substantial amount of money due to high returns. The trading volume of gold in domestic companies has been and continues to be high in the first quarter, demonstrating the shift of money into gold. Long-term bank deposits are currently declining, while short-term deposits are increasing. Dr. Hoe also predicts that deposit interest rates will likely increase from now until the end of the year, while lending interest rates may fluctuate less and could also rise.Economic expert Dao Ngoc Lam comments that many large enterprises are facing significant difficulties, while smaller businesses may be experiencing less severe challenges. Mr. Lam urges caution against excessive optimism, as the actual situation is not as promising as anticipated.Speaking at the forum, Mr. Truong Van Cam, Vice Chairman and General Secretary of the Vietnam Textile and Apparel Association, shared that the textile and garment industry has faced considerable challenges recently. The most significant difficulty, according to Mr. Cam, is pricing, with order values decreasing by 20 to 50%. Despite this, businesses must accept these conditions to maintain employment for their workers. Some businesses have even accepted loss-making orders to retain their workforce. Fortunately, from the beginning of Q1 2024 to the present, the situation has shown signs of improvement. Orders have become more abundant, and while prices are yet to meet expectations, they have begun to rise. Currently, textile and garment businesses are no longer in a position where they “accept anything” and can now be more selective in choosing orders.Mr. Ngo Sy Hoai, General Secretary of the Vietnam Timber and Forest Products Association, reported that the situation for timber businesses in 2023 was bleak and challenging. Businesses had predicted that the downward trend would continue and that recovery would take several years. In the first three months of this year, things seem to have improved, although not to the extent anticipated. In the first quarter, export turnover increased by 23.6%, and imports rose by 10.3%. Overall, the timber industry currently requires a qualitative shift. There is a perception that media and government agencies are over-emphasizing achievements and not accurately reflecting the true picture.Mr. Nguyen Quoc Toan, Director of the Agricultural Digital Transformation and Statistics Center, Ministry of Agriculture and Rural Development, believes that to enhance the competitiveness of Vietnamese businesses, particularly those in agriculture, it is imperative to improve the country’s logistics capabilities. To accomplish this, not only the government, ministries, and agencies but also industry associations and businesses have crucial roles to play. There needs to be substantial investment in the ecosystem, including cold storage, processing facilities, rail, and air transportation.Mr. Nguyen Vu Michael, Director of Boeing Vietnam, expressed regret that many American businesses had come to Vietnam and valued the opportunities for collaboration and the young, dynamic workforce, but ultimately did not remain in the country. He considers this a missed opportunity. Mr. Nguyen Vu Michael emphasized the need for Vietnam to provide more support to small and medium-sized enterprises (SMEs) so that they can capitalize on opportunities and strengthen partnerships with American businesses. “Foreign companies coming to Vietnam do not necessarily seek out only large businesses; they also need SMEs for collaboration,” affirmed the Director of Boeing Vietnam.Speakers and guests gathered for a commemorative photo after the forum concluded.
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