GDP growth could accelerate to 7% in Vietnam in 2024, with industrial and construction sectors expected to drive expansion

HANOI: Vietnam’s economic growth is accelerating and could meet or exceed the government’s target of 6.5% this year, according to Planning and Investment Minister Nguyen Chi Dung.

According to a statement on the government website citing officials, the minister said economic growth could reach as much as 7% this year, driven by improving conditions in the industrial and construction sectors.

“If the growth momentum is maintained and accelerates, the growth rate in 2024 is likely to meet or even exceed the target set by the National Assembly,” Dung said.

The International Monetary Fund forecasts Vietnam’s gross domestic product (GDP) will grow by 6% this year, compared with 5% in 2023 – a pace that would make it one of Asia’s fastest-growing economies.

Dung added that the economy is also benefiting from increasing exports and foreign direct investment.

Pledged foreign direct investment (FDI) this year could reach $39 billion to $40 billion, up from last year, according to Tran Quoc Phuong, vice minister of planning and investment.

In December 2023, the country declared a foreign direct investment value of USD 36.6 billion.

But a continuing drag on the economy is the apparent reluctance of government officials to direct funds to infrastructure in the face of an anti-corruption campaign that has frozen decision-making.

Payouts from public investment funds in the first half of the year are lower than in the same period last year and account for about 29.4% of Prime Minister Pham Minh Chinh’s plan, compared with about 30.5% in 2023.

Chinh has repeatedly pressed officials to speed up the issuance of approved investment funds.

The ministry presented two scenarios for economic growth for the rest of the year. In the first, third and fourth quarters, GDP could grow by 6.5% and 6.6%, respectively, the Post reported.

In the second scenario, GDP growth in the third quarter may reach 7.4% in the second half of the year, and 7.6% in the last period, the report said.

Chinh urged officials to aim for third-quarter economic growth of 6.5% to 7%.

He also ordered the central bank to ensure an adequate money supply and continue its policy of cutting lending rates and keeping borrowing costs low to support businesses. — Bloomberg