April 23, 2024 | 13:02 GMT+7

Strong impact of the global economy on Vietnam's economy

Ngoc Lan -

Although there are many positive signs, Vietnam's economy will still be significantly affected by the unpredictable situation of the global economy.

Photo: Viet Dung
Photo: Viet Dung

Statistical indicators for the first quarter of 2024 show that the macroeconomy continues to be stable; however, complex fluctuations in the world economic situation will significantly impact Vietnam's economic growth this year.

This is the opinion discussed by experts at a discussion with the theme of Economic Outlook for the First Quarter: "Opening the Way" for the Economy in 2024 held by Tap chi Kinh te Viet Nam/VnEconomy and the University of Economics & Business (UEB), Vietnam National University, Hanoi.

Positive Signs

In the first quarter of 2024, Dr. Chu Van Lam, Editor-in-Chief of Tap chi Kinh te Viet Nam/VnEconomy, pointed out that inflation is controlled at an appropriate level; supply and demand of essential goods are guaranteed; the agriculture, forestry, and fisheries sector continue to be a solid pillar of the economy with stable growth; attracting foreign investment continues to increase and is an attractive destination for many international investment corporations.

Notably, the growth scenario in Resolution No. 01/NQ-CP dated January 5, 2024, set the growth target in 2024 at 6 - 6.5%, of which the first quarter of 2024 with an increase of 5.2 - 5.6%. Growth results in the first quarter of 2024 reached 5.66%, which is higher than the increase in the high scenario of 5.6%.

"Although this is not a high growth rate in recent years, especially compared to the period before the Covid-19 epidemic, it is a positive and remarkable result when the economic growth of many countries in the region and around the world is at a low level," said Mr. Lam.

Associate Professor PhD Nguyen Anh Thu, Vice Rector of UEB, also added the first months of the year are an important time to identify and evaluate the economic situation, build appropriate strategies and action plans, thereby opening the way for development in the remaining months of the year.

Impact of the World Economy

According to research by the UEB, geopolitics and politics are the biggest risk group for the global economy this year. The Israel-Hamas war in Gaza, the situation in the Red Sea, and the continuing fighting between Russia and Ukraine have been leading to adverse effects on the world economy, especially the disruption of energy supply, pushing up energy prices, and leading to higher logistics costs.

Besides, there is a slowdown in the Chinese economy. "Economies that depend on Chinese supply chains and market could face a decline in demand in many sectors such as chemicals, electronics, and machinery," the research noted. "Companies and countries may have to consider business strategies and supply chains."

Other risks include instability of the global financial market, technology, climate, and global fragmentation.

Dr. Can Van Luc, Chief Economist of BIDV bank and a member of the National Financial and Monetary Policy Advisory Council also added although inflation and interest rates have decreased, they are still high, particularly a big risk to the world economy. The risk of rising inflation is causing central banks to delay lowering interest rates.

"All of these risks are not new, but they are becoming more prominent in the global economy, affecting the Vietnamese economy," said Associate Professor PhD Vu Thanh Huong, Deputy Dean of the Faculty of Economics and International Business, UEB.

Outlook in 2024

To achieve the growth target of 6-6.5% as set out, economic growth in the last quarters of the year needs to reach 5.85 - 6.28% in the 6% growth scenario and 6.0 - 6.28% in the 6.5% growth scenario. 32%-7.08% in the 6.5% growth scenario.

This requires effective solutions to promote growth and scenarios to cope with situations that arise when Vietnam is a highly open economy and is affected by adverse fluctuations from the recent global economic and political situation, says Dr. Lam.

"In addition, there are reform orientations and operating solutions to promote socioeconomic recovery and development, associated with maintaining macroeconomic stability, controlling inflation, and ensuring major balances that need to continue to be implemented," he added. "In fact, Vietnam is still a bright spot in terms of growth, but the economy in the first quarter of 2024 still has problems that need to be thoroughly considered to have appropriate solutions."

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