General Statistics Office director Nguyễn Thị Hương

Speeding up disbursement of public investment capital has strategic significance and is a key task to contribute to promoting economic growth in the next quarters and the whole year. General Statistics Office (GSO) director Nguyễn Thị Hương speaks to Vietnam News Agency about solutions to boost disbursement of public investment capital.

How does public investment capital disbursement mean to economic growth in the situation of Việt Nam facing many difficulties and challenges in economic development this year?

The disbursement of public investment capital plays a key role, creating an important driving force to boost economic growth.

2024 is a year of acceleration and particular importance to successfully implement the five-year socio-economic development plan and the medium-term public investment plan for the 2021-25 period.

From the beginning of the year, ministries, branches and localities have focused on implementing the tasks and solutions set out in the Government's Resolution 01 this year, aiming to remove difficulties of businesses, promote production and business, and promote the disbursement of public investment capital to create motivation for economic growth.

Disbursement of public investment capital plays an important role in upgrading synchronous infrastructure systems, creating jobs and income for workers, and adding a large source of capital to the economy.

How were the results of public investment capital disbursement in the first quarter of 2024?

The Government and the Prime Minister have firmly directed implementation of the plans on allocation and disbursement of public investment capital from the first month of this year.

The Prime Minister issued two Official Telegrams, 01/CĐ-TTg dated January 1, 2024 and 22/CĐ-TTg dated March 22, 2024, directing agencies and units to speed up the progress of transport infrastructure projects, and the progress of allocating and disbursing the public investment capital in 2024.

Accordingly, ministries, branches and localities have focused on carrying out the approved public investment capital plan to ensure that eligible projects receive adequate investment funds and implemented immediately from the first months of 2024.

However, the Lunar New Year holiday and some problems, especially in compensation and site clearance, have slowed down the progress of disbursing public investment capital in the first quarter.

In the first quarter of 2024, an investment capital from the State budget reached VNĐ97.7 trillion, equal to 13.9 per cent of the year's plan and an increase of 3.7 per cent over the same period last year.

How does the public investment capital disbursement in the first quarter effect the following quarters?

This has both strategic significance and is a key task to contribute to promoting economic growth in the following quarters.

The 2021-23 period was a period of many difficulties and challenges for the economic growth in the world and in Việt Nam. This year is forecast to have more difficulties and many risks from many negative impacts of the COVID-19 pandemic, trade conflicts, political conflicts and the global economic recession.

In that context, public investment continues to be one of the main drivers of economic growth.

With this leading role, the disbursement of public investment capital stimulates many other capital sources to participate in investment activities. Those factors will create new dynamism for the development of industries and localities.

At present, the public investment capital focuses on building infrastructure, transportation systems, warehouses, essential works of the economy such as hospitals, schools, cultural and sports works and national target programmes.

In the short and medium term, when public investment capital is implemented, it will directly impact many sectors, such as construction, transportation, cement, iron, steel, and brick and tile production industries. According to the GSO, a 1 per cent increase in public investment capital will increase GDP by about 0.08 per cent.

In the long term, the public investment will contribute to solving essential needs, improving people's lives, creating favourable conditions in the circulation of goods between regions to reduce transportation costs, and promoting regional connectivity and the supply chain of goods and raw materials for production and business activities. Those will improve the competitiveness of the economy and promote long-term economic growth.

Efficiency in public investment will help improve business liquidity, and stimulate expansion of production, affecting capital supply channels for the economy, such as financial, banking and insurance services when capital needs for production are increasingly high.

What solutions will help promote this public investment capital source?

To further promote the effectiveness of this capital source, the Government needs to prioritise stimulating investment in projects that are about to be completed, and quickly put into operation large scale and potential projects. That will directly contribute to maintaining and expanding the production and business of enterprises and the economy.

In addition, the Government needs to develop appropriate public investment strategies, plans and programmes meeting the investment needs of each industry, sector and locality.

At the same time, it focuses on investing in large projects, eliminating scattered investments, urgently putting projects into operation, and improving the efficiency of public investment capital.

Along with that, the Government needs to have solutions to promote the role and responsibilities of leaders of ministries, branches, Governmental agencies and localities in disbursing public investment capital.

Especially, it is necessary to focus on handling the issue of site clearance. Mechanisms and compensation levels for site clearance must be satisfactory to ensure the rights of people. — VNS