Vietnam’s economy faced many difficulties in 2023 due to major external and internal risks, but the year is still estimated to have seen growth of over 5 per cent. So, in 2024, risks are predicted. Will the impact on Vietnam’s economy be different from 2023? What external risk factors will have the greatest impact on economic growth?

I think the global economic conditions are unfortunately not going to improve a lot this year, at least not in the first half. What we expect, and this is from a global economic prospect report from the bank that came out just yesterday, is that, actually, the global economy is going to slow down a little bit more, and soften a little bit more, before picking up and strengthening in 2025.

This means that, for the world, generally speaking, 2024 is still going to be a challenging year. In the case of Vietnam, if we look at its three major export markets, there are expectations that the US economy will slow down compared to last year and that the EU will grow only slightly. And the Chinese economy is also expected to slow down. Assessing the external factors, while some recovery is expected, we don’t foresee a significant increase in exports or overall growth that relies heavily on exports.

I believe the focus should shift more towards domestic drivers. Potentially, consumption could be the major driver of growth, and if investment, domestic private investment, can be revived, improved, that could also be a good contributor to economic growth.

Given this reality, I think it’s important for the government to continue providing supportive fiscal policy, including, for example, public investment, which would then help support aggregate demand in 2024.

A notable feature is that Vietnam’s economic growth in 2023 increased quarter after quarter. The first quarter saw growth of 3.41 per cent, the second quarter 4.25 per cent, the third quarter 5.47 per cent, and the fourth quarter 6.72 per cent [according to data from the General Statistics Office]. What do you think about this quarterly economic growth, when fourth-quarter growth was nearly double first-quarter growth, in the difficult context of 2023? Can you further analyze the impact of the weaknesses? Public investment in the fourth quarter increased growth significantly, and public investment is an important driving force for growth. Can this quarterly growth be maintained in 2024 in the current global economic context?

So, from my understanding and based on the data we have observed, there wasn’t a significant decline in exports last year, especially in the second and third quarters. Naturally, this impacted overall economic growth during that period. However, in the second half of the year, we have witnessed a gradual recovery and a moderate resurgence in both overall exports and manufacturing exports. The data from the fourth quarter seems to be associated with this rebound in exports during the final quarter of the year. Hence, it appears that this is the primary source of growth. To my knowledge, the GSO also revised their growth figures for all quarters, not just the last quarter.

We think for now that, given the reality of the global economy, that it will be a challenging year going forward. We think Vietnam’s economy is going to do a little bit better than last year, but unfortunately, I don’t think it’s going to grow at the rates we saw before Covid, like 6.5-7 per cent, or see potential for high economic growth. That is basically because the whole world is experiencing these challenges. It’s not just Vietnam. And given what we have seen over the past several years, Vietnam’s economy has actually done pretty well compared to the rest of the world, right? It’s done remarkably well, and I think next year is going to be a bit better than last year, but not as high as it was. We would like it to eventually go back to 6.5-7 per cent.

There were three driving forces helping Vietnam’s economic growth in 2023: public investment, exports, and consumption. Is it possible that, in 2024, in an ever-changing global situation, that new driving forces will appear to help Vietnam’s economic growth? Could the digital economy be a long-term or short-term driving force? Could agriculture and forestry be a strength and foundation for Vietnam’s economy, given food issues around the world?

Usually when we look at economic drivers, for Vietnam, we have external demand, and then we have domestic demand. In external demand, we’re expecting a moderate recovery in exports. So that’s a positive sign for Vietnam. On the domestic side, you basically have domestic consumption, which we expect to hopefully recover moderately this year.

We have various public investments, and then we have private investments, private domestic investment, and I think it is really important for the government to see if they can help or adopt policies to help the real estate sector recover substantially and put the current challenges behind it. Because the fact that the real estate sector is in a slump is affecting investment, private investment, and is also affecting the construction sector and other sectors that are basically all connected to real estate. So, helping resolve the sector’s problems would help. Recovery in investment would also help generally, with hopefully growth in sectors like construction, design, and architecture, and all of that.

The agriculture and forestry sector has always been a steady provider of economic growth. It’s a very small sector, but it provides a lot of jobs and incomes for people in rural areas. If one wants to see the real agricultural sector blossom and provide much more in terms of economic growth, it will be very important to increase technology, make it much more modern, which will make it much more sophisticated and technology-driven, and promote more agribusiness and promote more productivity growth in the sector. So then it could become a much more important contributor to economic growth.