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Thursday, June 20, 2024

Two growth scenarios for H2 mapped out

By T. Huy

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HCMC – The Ministry of Industry and Trade has worked out two scenarios for economic growth in the second half of this year.

In the first scenario, Vietnam aims for a gross domestic product (GDP) growth rate of 6% for all of 2023, meaning GDP growth in the third quarter should be 6.8% and 9% in the fourth quarter. This translates to an 8% growth rate for the second half of the year.

In the second scenario, with a target GDP growth of 6.5% for 2023, the economy would need to expand by 7.4% in the third quarter and 10.3% in the final quarter, resulting in an overall growth rate of 8.9% from July to December.

Despite the lower-than-expected economic growth in the first quarter and more difficulties ahead, the Government sticks with the nation’s GDP growth target at 6-6.5% for the year.

The country’s GDP grew 3.32% in the first quarter and improved to 4.14% in the following three months, resulting in growth of 3.72% in the first half. The slow growth of the industrial-construction sector, specifically at 1.1%, was a contributing factor to the modest GDP growth in the first half of the year.

The pandemic’s prolonged effects have put significant pressure on businesses, pushing them to their limits and resulting in many, particularly small- and medium-sized enterprises, exiting the market.

Drastic downsizing among factories in major cities and provinces has compounded the situation, resulting in the unemployment rate rising to 2.06% from April to June.

To achieve the full-year GDP growth target, the ministry proposed prioritizing the removal of obstacles for businesses, supporting key drivers of economic growth, promoting domestic consumption, enhancing exports, and attracting investment.

It also called for close monitoring and action in areas such as securities, corporate bonds, real estate, and labor are recommended.

The ministry emphasized the importance of accelerating administrative procedure reforms and improving investment and business conditions.

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