A street market in Lâm Đồng Province. Policy measures in 2024 will need to combine short-term growth support measures to strengthen domestic demand with long-term structural remedies to promote sustainable growth. — VNA/VNS Photo Hồng Đạt

HÀ NỘI — The Asian Development Bank (ADB) has maintained its earlier growth projection for Việt Nam this year despite lingering uncertainties in the external environment.

The economy is expected to grow at 6 per cent in 2024 and 6.2 per cent in 2025, according to the Asian Development Outlook April 2024 released today.

The report pointed out that a relatively broad-based restoration in export-led manufacturing and services as well as stable performance of the agriculture sector are expected to support the Vietnamese economy’s recovery momentum.

Positive inflows of foreign direct investment (FDI) and remittances, a sustained trade surplus, recoveries in domestic consumption, and continued fiscal stimulus characterised by a substantial public investment programme are seen as key to boosting growth in 2024.

“The Vietnamese economy is expected to grow at a solid pace this year and the next, despite a challenging global environment,” said ADB Country Director for Việt Nam Shantanu Chakraborty. “However, global geopolitical uncertainties and domestic structural fragilities could impact the outlook. Therefore, policy measures in 2024 will need to combine short-term growth support measures to strengthen domestic demand with long-term structural remedies to promote sustainable growth.” 

Softened global demand caused by a slow economic recovery and delayed normalisation of interest rates in the US and other advanced economies, coupled with continued geopolitical tensions, are likely to hamper a full recovery of Việt Nam’s export-led growth in 2024.

To accelerate growth, stronger measures are required to address domestic structural fragilities, such as heavy reliance on FDI-led manufacturing exports, weak linkages between manufacturing export industries and the rest of the economy, incipient capital markets, an overreliance on bank credit, and complex regulatory barriers to business.

Public investment remains a catalyst for Việt Nam’s economic growth, so its effective implementation is crucial. Although the Government has applied various measures to expedite public investment and enhance effective execution, more systematic measures are required to improve legal and regulatory processes, reducing constraints on efficient delivery, according to the report. — VNS