Investment, export, consumption to propel GDP growth: Insiders

Vietnam could reach the GDP growth target of 6-6.5% set by the National Assembly on the back of strong investment, export, and consumption, according to experts.

The General Statistics Office said that the three drivers of the economy witnessed robust expansion during January-July.

Total foreign direct investment (FDI) in Vietnam during the seven-month span topped 18 billion USD, a year-on-year increase of 10.9%. Foreign investors injected their capital into 48 cities and provinces nationwide, with Bac Ninh attracting the largest amount of nearly 3.2 billion USD.

They poured 10.76 billion USD in 1,816 new projects, rising 35.6% and 11.6%, respectively. Meanwhile, 734 projects had their capital adjusted up with a total amount of more than 10.76 billion USD, down 0.3% in the project number, and up 19.4% in capital year-on-year. Capital contributions and share purchases fell 45.2% to 2.27 billion USD.

Vietnam’s total foreign trade during the period neared 440 billion USD, with export revenue estimated at 226.98 billion USD, up 17% and 15.7%, respectively, against the same time last year

Vu Tuan Anh, an expert from the Junior Chamber International (JCI) Vietnam, said the country has nine exports with turnover of more than 5 billion USD each, including electronics, computers and parts (over 39.86 billion USD), phones and parts (over 32.44 billion USD), and machines and spare parts (over 27.65 billion USD).

He expected that vegetable export could reach 6.5-7 billion USD, joining the “over-five-billion-USD club”.

Regarding domestic consumption, total retail sales and services revenue in the first seven months of the year was estimated at more than 3.62 trillion VND (143.55 million USD), rising 8.7% over the same time last year.

Based on the economic performance in the first half, the Central Institute for Economic Management presented two scenarios for the Vietnamese macro-economy for the rest of the year.

In the first scenario, the GDP growth is forecast at 6.55%, and export revenue to increase by 9.54% compared to 2023. The average consumer price index for the year is projected to rise by 4.32% year-on-year, and the trade balance is to maintain a surplus of 5.7 billion USD. This is based on the assumption that world economic factors will remain consistent with the assessments of international organisations, and Vietnam maintains similar policy efforts as proposed in the first half of 2024.

Meanwhile, in the second one, the country’s economic growth will reach 6.95%, with export growth hitting 11.64%, CPI surging by 4.12%, and the trade surplus rising to 7.3 billion USD. The scenario involves more positive global economic conditions, including faster recovery, increasing interest from investors in Southeast Asian countries, supply chain restoration, and positive changes in investments in digital transformation and green transition.

Nguyen Trong Hai from the Thuongmai University held that as the main pillars of the economy, investment, export, and consumption will maintain their growth, helping Vietnam realise its set economic targets.

Many enterprises have received orders till the end of Q3, which means export will continue thriving for the rest of the year, he added.

Chief Economist at ADB in Vietnam Nguyen Ba Hung said that the Government needs to continue improving its investment and business environments while stimulating domestic consumption, including private and Government consumption and public investment.

An expansionary fiscal policy is necessary to carry out public spending in a more effective manner, he suggested, adding accelerating the disbursement of public investment will create more jobs and help lure private investment.