Economy improves but challenges remain: official

August 10, 2023 - 07:23
Phương noted that measures to speed up public investment disbursement, foster exports, and stimulate consumption are being carried out strongly to fuel growth.
Big challenges at present for businesses are related to the market, money flow, and administrative procedures. — VNA/VNS Photo Hầng Trần

HÀ NỘI — Despite strong efforts and more positive signals recorded, Việt Nam’s economic growth stood at only 3.72 per cent in the first half of 2023, putting heavy pressure on the realisation of this year’s GDP growth target of 6.5 per cent, said Deputy Minister of Planning and Investment Trần Quốc Phương.

Addressing the Việt Nam Wealth Advisors Summit 2023 in Hà Nội on Tuesday, he said it is worrying that production and business activities in many sectors are struggling with difficulties. The resilience of enterprises has been eroded after the COVID-19 pandemic, and some of them have had to scale down operations and output.

Big challenges at present are related to the market, cash flows, and administrative procedures, he pointed out, noting that capital costs are still high while enterprises still find it hard to access credit, issue corporate bonds, or sell stocks.

Outstanding credit during the first half of the year increased by 4.28 per cent, lower than the rise of 9.44 per cent seen in the same period of 2022, statistics show.

Phương noted that measures to speed up public investment disbursement, foster exports, and stimulate consumption are being carried out strongly to fuel growth.

This is a very heavy task because the failure to achieve this year’s growth target will affect the implementation of the five-year plan for 2021-25, the 10-year strategy for 2021-30, and even the targets for 2030-45 set in the resolution of the 13th National Party Congress.

It will be difficult to reach targets without breakthrough mechanisms and policies, he went on.

Given this, the Ministry of Planning and Investment has suggested the Government propose the Politburo amend and supplement some mechanisms and policies related to production, business, and investment such as those on the change of land use purposes, the use of local budgets to carry out the tasks and projects managed by ministries and central agencies in localities, and the increase of the proportion of State capital in public-private partnership projects.

These are urgent issues needing quick amendment to tackle bottlenecks and facilitate socio-economic development, he added.

Nguyễn Anh Dương, head of the general research board at the Central Institute for Economic Management (CIEM), held that boosting economic growth, stabilising the macro-economy and controlling inflation remain important tasks, but more attention should be paid to removing obstacles for businesses.

In particular, it is necessary to improve their capital access and capital absorption capacity and improve the business climate and labour productivity, as well as bravely issue regulations on pilot mechanisms for new economic models such as fintech and the circular economy.

The Government should also effectively implement the free trade agreements Việt Nam has joined and consider negotiating and upgrading others, he said.

In addition, localities need to effectively attract and use foreign investment in the new context, Dương said, suggesting that they further open some fields to foreign investors, boost cooperation with other localities in FDI attraction, step up technology transfer from foreign firms, and increase training for labourers to meet FDI companies’ requirements.

For his part, Lê Xuân Nghĩa, a member of the National Advisory Council for Financial and Monetary Policies, perceived that the Vietnamese economy will record a U-shape recovery instead of a fast one because the global economy is also rebounding gradually. He also noted that six-month foreign trade decreased but the decline has decelerated while some export sectors like electronics and agriculture are bouncing back well, and the service sector is also recovering relatively well.

He predicted that the economy will recover more in the fourth quarter of 2023.

Talking about new investment channels, Thái Việt Dũng, Director of Exness Vietnam said as the world's central banks increasingly need to expand their balance sheets, there is always a need to move capital between different continents and types of assets. Therefore, at favourable times, new investment channels or assets would be always created to receive a small part of the capital that needs to be transferred from different markets.

“Over time, the amount of money available to invest in the market is expanding around the world, while traditional investment assets could only absorb a certain amount of it. Generating new investment channels or new types of assets is a fundamental need for investors. New investment instruments such as derivatives, cryptocurrencies or new investment fund management products are emerging strongly in the second half of 2023,” he added. — VNS