The Vietnamese economy is maintaining its growth momentum in the second quarter, with many important results in various fields. The business community and international organisations remain upbeat about the prospects of the Vietnamese economy.

The construction site of the An Phu Interchange in Ho Chi Minh City. (Photo: Minh Quan)

According to Minister of Planning and Investment Nguyen Chi Dung, in the first four months of the year, Vietnam maintained a stable macroeconomy, kept inflation under control, and ensured major balances. The exchange rates were regulated in a flexible manner.

Bringing capital to the economy

The Ministry of Planning and Investment reported that state budget revenue in the past four months reached 43.1% of the target, up 10.1% from a year earlier. Foreign investment was buoyant with many major global technology companies expressing desire to invest in electronics, semiconductors, and renewable energy in Vietnam.

Total retail sales and consumer service revenue rose 8.5%. Foreign arrivals reached nearly 6.2 million, up 68.3% from a year earlier and exceeding the figure for 2019 before the onset of COVID-19. It is worth mentioning is that public investment disbursement in the January-April period reached 17.46% of the target, compared with 15.65% in 2023, helping to bring large sums of capital to the economy to support growth and development.

In the overall economic recovery trend, the General Statistics Office (GSO) underlined the strong recovery of export. In the first four months, the export of electronic products, computers, and parts brought in 21.6 billion USD, up 34.9% from a year earlier — the highest growth among exports — and accounting for 17.5% of Vietnam’s total exports. It is projected that the export of electronics and computers will continue growing strongly in 2024 while maintaining its position as a key export commodity, helping to ensure macroeconomic stability and enhance the standard of living for workers.

Dorsati Madani, the World Bank’s senior economist in Vietnam, also stated that the Vietnamese economy is showing signs of recovery in early 2024. Exports are recovering, while consumption and private domestic investment are growing more gradually. She said the export of manufactured goods is expected to continue recovering in the next two years based on projections of slight growth and import demand of Vietnam’s major trading partners such as the US, Europe, and China.

A report by the National Assembly’s Economic Committee noted that it is necessary to advance the economic growth model that adapts to climate change through research into a green and sustainable growth model as well as to address the bottlenecks to business and production. At the same time, it is necessary to closely watch market developments and policy changes in partner countries to propose appropriate measures.

Removing difficulties facing enterprises

At a recent meeting of the National Assembly Standing Committee, the National Assembly’s Economic Committee underlined the difficulties facing the business community. The Economic Committee stated that slow credit growth amid reduced interest rates has demonstrated that enterprises’ ability to access and absorb capital remains limited.

To fulfil the economic growth target and other goals for 2024, the Economic Committee asked the government to focus on implementing a number of key priorities in macroeconomic management. Specifically, the government needs to continue pursuing a proactive, flexible, prompt and effective monetary policy and ensure a safe and healthy financial system to support growth. At the same time, measures are needed to address difficulties in accessing credit, provide capital for priority sectors, and continue implementing tax and fee policies in an effective manner.

At a directive on monetary policy implementation in 2024 issued on May 2, the Prime Minister assigned the State Bank of Vietnam to direct credit institutions to actively roll out measures to boost credit growth, channel credit to business, production, priority sectors, and drivers of growth.

Other important measures emphasised by the Prime Minister include reducing lending interest rates, publicising average lending rates for enterprises to choose banks with appropriate rates, and increasing consumer loans through the electronic and online forms.

Along with measures to inject capital into the economy, the Prime Minister also asked the Ministry of Planning and Investment to step up efforts to improve the business environment and simplify the investment process and administrative procedures to facilitate investment and business activities.