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Vietnam’s accelerating 2024 economic growth could hit 7%

Bloomberg • 2 min read
Vietnam’s accelerating 2024 economic growth could hit 7%
The International Monetary Fund has forecast Vietnam’s gross domestic product to expand 6% this year, up from 5% in 2023. Photo: Bloomberg
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Vietnam’s economic growth is accelerating and could meet or exceed the government’s 6.5% target this year, according to Planning and Investment Minister Nguyen Chi Dung.

The minister said economic expansion may even reach 7% this year as improving industrial and construction sectors drive growth, according to a statement on the government’s website citing officials at Saturday meetings.

“If growth momentums continue to be maintained and accelerate, the growth rate in 2024 is likely to reach or even exceed the target set by the National Assembly,” Dung said.

The International Monetary Fund has forecast Vietnam’s gross domestic product to expand 6% this year, up from 5% in 2023 — a pace that would make it among Asia’s fastest growing economies.

The economy is also benefiting from increasing exports and foreign direct investment, Dung said. 

Pledged FDI for the year may reach US$39-US$40 billion ($52.64-$53.99 billion), up from last year, according to Tran Quoc Phuong, deputy minister of planning and investment. The country posted pledged FDI at US$36.6 billion as of December 2023.

See also: Adani plans to build port in Vietnam to tap trade opportunities

One continuing drag on the economy, though, is the apparent reluctance of government officials to release infrastructure funds amid the anti-graft campaign that has frozen decision-making.

Disbursements of public investment funds in the first half of the year are lower than the same period last year, at about 29.4% of Prime Minister Pham Minh Chinh’s plan versus about 30.5% in 2023. Chinh has repeatedly pushed officials to quicken expenditures of approved investment funds.

The ministry laid out two economic growth scenarios for the rest of the year. In the first, the third and fourth quarters could see GDP rise 6.5% and 6.6%, respectively, the post said. 

See also: Cambodia’s resilient growth and political stability underpin investment interest

For the second scenario, the last half of the year could unfold with third-quarter GDP growth at 7.4%, and the final period reaching 7.6%, it said.

Chinh urged officials to push for third-quarter economic growth of 6.5% to 7%. He also instructed the central bank to ensure adequate money supply and continued policies to reduce lending interest rates and keep borrowing costs low to support businesses.

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