Hà Nội outperforms rest of country: leader
HÀ NỘI — Ha Noi has recorded better economic results than anywhere else in Viet Nam amid the COVID-19
In the past 9 months, Vietnam's economy grew by 4.24% over the same period. This is an improvement compared to 3.72% in the first half of 2023 but only half of the growth rate of 8.85% compared to the same period in 2022.
The official growth target of 6.5% is considered a challenge for Vietnam if not an "impossible task" in the current extremely difficult context, even though the economy has begun to recover. Initially, many signs of improvement and prosperity were recorded.
Vietnam's economy faces 'impossible task'
As Sputnik reported, the General Statistics Office announced new data showing that Vietnam's third-quarter GDP is estimated to increase by 5.33% over the same period last year. Overall, for 9 months, GDP increased by 4.24%.
The increase is disappointing even though it is still higher than the speed in the same period in 2020 and 2021 when the economies of Vietnam and other countries hit bottom because of the epidemic. The target of 6.5% for GDP growth this year is extremely challenging.
At a recent Government meeting, as Sputnik reported, the Ministry of Planning and Investment outlined three scenarios for Vietnam's economic growth from now until the end of the year. According to Minister Nguyen Chi Dung, the highest is 6%.
Scenario 1: the year's economic growth is about 5.0%, meaning the fourth quarter needs to increase by 7.0% (the fourth quarter of 2022 increases by 5.92%). Scenario 2: Economic growth for the year is about 5.5%. The fourth quarter must increase by 8.8%. Scenario 3: Economic growth for the whole year is about 6%. The fourth quarter needs to increase by 10.6%. This is a huge challenge.
The Minister admitted that growth in the fourth quarter depends heavily on the speed of recovery of industrial production, especially the processing and manufacturing industry; the increase in demand in Vietnam's major and key export markets, tourism and domestic consumption activities at the end of the year and close to the Lunar New Year 2024, are the basis for export and domestic markets. Water grows faster.
However, it should be noted that to achieve the target of 6.5% growth, Vietnam's growth rate in the fourth quarter of 2023 will need to be at least 12%. According to UOB Bank, this will likely happen in the current context if basic demand is strongly improved.
Regarding growth scenarios, as stated by Sputnik, Prime Minister Pham Minh Chinh has requested to choose a full-year GDP growth scenario of about 6% to continue striving to achieve the highest possible results for 2023.
Western institutions simultaneously lowered their growth forecasts for Vietnam.
As Sputnik mentioned, many international financial organizations and institutions have lowered their forecasts for Vietnam's economic growth amid many difficulties and challenges.
In the East Asia-Pacific Regional Economic Report published on October 2, 2023, the World Bank (WB) stated that Vietnam's GDP growth at comparative prices will slow to 4.7%. 2023 due to weak private consumption, a gloomy real estate market and a sharp decline in external demand.
The Asian Development Bank (ADB) also forecasts that Vietnam's economic growth will slow to 5.8% in 2023.
The International Monetary Fund (IMF) said that the strong recovery momentum of Vietnam's economy has stalled due to "adverse winds" that strongly impacted the economy at the end of 2022 and in the first half of 2023. Accordingly, Vietnam's GDP growth in 2023 will slow to 4.7% before rebounding to 5.8% in 2024.
UOB Bank adjusted Vietnam's full-year growth forecast to 5.0% from the previous 5.2%.
According to experts, this requires economic activity and orders to increase rapidly in the coming months. As usual, the fourth quarter is the best-performing quarter in most years in Vietnam, although growth in 2023 will be pressured when compared with 2022 figures with exceptional growth.
The economy began to improve.
Informing the press, the Director of the Department of National Accounts System, Nguyen Thi Mai Hanh, informed that economic growth, although facing many difficulties, is "on the rise".
According to this person, Vietnam had the highest growth in the third quarter compared to the previous two quarters. In the first and second quarters, Vietnam grew only 3.28% and 4.05%. Contributing strongly to growth is the service sector. This continues to be considered a bright spot of the economy when industrial production is still limited and cannot accelerate.
Ms. Hanh also said that production has had positive changes, increasing by 5.61% in the third quarter, after a negative decline in the first quarter (-0.49%) and a slight increase in the second quarter (0.6 %).
The report published by UOB bank on October 2 cited data published in September (in Vietnam) showing "some encouraging signs" when activities may have changed in the direction positive when operational efficiency improves every month.
Typically, Vietnam's exports increased in September after 6 consecutive months of decline, reaching 4.6% over the same period. Imports also showed a similar trend, increasing 2.6% over the same period after 10 consecutive months of decline. Similarly, industrial output rose 5.1% year-on-year and was the "best gain" since November 2022, as the manufacturing sector recorded its fourth consecutive monthly increase in output over the same period.
According to UOB Vietnam Bank's Global Economic and Market Research department, one reason conditions are likely to improve further is that foreign direct investment (FDI) flows continue to flow in Vietnam.
According to UOB, realized FDI capital reached 2.2% over the same period last year, at 15.9 billion USD and increased for the fourth consecutive month. If the growth rate continues at the same level, it is expected that FDI inflows for the whole year will likely reach 19.7 billion USD, like in 2021.
Registered FDI is a forward-looking indicator for disbursed FDI, up 7.7% year-on-year at 20.2 billion USD, exceeding the 18.8 billion USD recorded in the same period last year. 2022. Singapore is the largest source of registered FDI capital at 4 billion USD, followed by China (2.9 billion USD).
The manufacturing sector is still the top destination, attracting more than 14 billion USD compared to the beginning of the year, an increase of 15.5% over the same period.
In Vietnam, consumer spending has regained growth momentum, with overall retail trade growing 9.4% year-on-year after hovering below 7% in the previous three months and was the Best month since April 2023.
Retail sales also increased by 7.4% over the same period, the largest increase since April 2023, while service and accommodation trade output increased by 34.7% after fluctuating around 5 - 10% in the previous 4 months, showing that tourism activities are accelerating, according to UOB.
Regarding the issue of Vietnam gradually regaining growth drivers, at the recent government meeting, reports also said that the industrial sector continued to increase again, and the added value of the entire industrial sector in the third quarter increased. 4.57% (in the second quarter increased by 0.95%. In the first quarter decreased by 0.75%), the processing and manufacturing industry increased by 5.61%.
Prime Minister Pham Minh Chinh admitted that the GDP growth rate is unexpected. Inflation is still under much pressure. Growth drivers face difficulties, such as slow industrial recovery value added in 9 months only increased by 1.65%. The labour and employment situation faces many challenges.
In the current context, he requested that it be necessary to prioritize promoting growth, specifically in the processing and manufacturing industry, and continue to make more efforts to complete the highest goals and tasks. 2023 plan.
Take advantage of the market of 100 million people.
Responding to Vietnam Financial Times (an agency of the Ministry of Finance) about the economic situation in 2023, Director General of the General Statistics Office Nguyen Thi Huong said that the GDP growth target of 6.5% in 2023 is difficult to achieve.
According to Ms Huong, for fast and sustainable long-term development, Vietnam must ensure macroeconomic stability, improve resilience, and consolidate traditional growth drivers while creating enough space to exploit new models and growth drivers effectively.
Vietnam also needs to promote consumption and focus on developing the domestic market to exploit the potential market of 100 million people effectively; continue to have appropriate solutions to stimulate trade and services and develop tourism; Expand and diversify export markets and products; take advantage of signed FTAs; Focus on promoting public investment disbursement.
According to Ms Huong, perfecting and improving the quality of economic institutions, promoting digital transformation, green growth and energy conversion, and developing modern economic models will be new driving forces for the economy.
