Reporter: Looking back at 2023, despite numerous difficulties and challenges caused by the global economic slowdown, our economy recorded many positive highlights thanks to the Government’s decisive direction and the efforts of ministries and sectors, creating momentum for 2024. What are your comments on the economic picture over the past year?

Assoc. Prof. Dr. Pham The Anh

Assoc. Prof. Dr. Pham The Anh: I agree with that assessment. Globally, economic growth is slowing, with growth trending lower from one year to the next. Global economic growth stood at 3.5% in 2022 but only 3% in 2023.

Meanwhile, Vietnam’s National Assembly set a growth target of 6.5% for 2023, lower than the 8.02% achieved in 2022.

Thanks to the Government’s decisive direction and the efforts of ministries and sectors, our economy maintained macroeconomic stability amid the global economic slowdown.

According to figures recently released by the General Statistics Office, our economy’s GDP was estimated at approximately VND 10.22 quadrillion by the end of 2023, equivalent to USD 430 billion. GDP per capita at current prices in 2023 was estimated at VND 101.9 million per person, equivalent to USD 4,284, an increase of USD 160 from 2022. In the fourth quarter of 2023 alone, gross domestic product (GDP) was estimated to have grown by 6.72% year on year, higher than fourth-quarter growth in the years from 2020 to 2022.

I believe these results reflect the impact of the Government’s recent fiscal and monetary expansion efforts, which supported businesses and people in coping with difficulties, helping the economy show signs of recovery. Core inflation has declined.

Reporter: Could you provide a more in-depth analysis of the challenges and positive signals in Vietnam’s economy in 2023?

Assoc. Prof. Dr. Pham The Anh: The domestic economic recovery is closely tied to global economic developments. Demand for credit for production is currently low and will remain so until exports pick up again. The economy faces difficulties, the real estate market is frozen, and nonperforming loans are rising rapidly. These challenges have persisted and will continue into 2024.

However, in my view, the economy’s current bright spots are positive growth in agriculture, forestry and fisheries, the return to growth in industry and construction, and the recovery of the processing and manufacturing sector. Alongside this, public investment is helping drive growth in construction. Electricity production and distribution have improved thanks to the weather.

Regarding exports and imports, according to the General Statistics Office, total trade in 2023 was estimated at USD 683 billion, comprising estimated exports of USD 355.5 billion and imports of USD 327.5 billion. The trade balance continued to record a surplus for the eighth consecutive year, reaching nearly USD 28 billion, almost three times the 2022 level. This contributed positively to the balance of payments, helping increase foreign exchange reserves and stabilize the exchange rate and other macroeconomic indicators. The markets with which Vietnam recorded its largest trade surpluses included the United States and the EU, while China accounted for its largest trade deficit.

Rice exports were one of the bright spots in exports in 2023. Photo: File

Although core inflation has declined, the pace of decline is slow. Attention should be paid to signs of a renewed rise in headline inflation due to higher fuel, electricity, water and food prices, a rising exchange rate, and the effects of political conflicts.

Therefore, the policy direction ahead is to continue easing to support growth while exercising greater caution regarding inflation. Accordingly, the State Bank of Vietnam will maintain low interest rates and intervene to stabilize the exchange rate when necessary, while fiscal policy can be used to support economic recovery.

Reporter: With global economic growth forecast at only around 2.9% in 2024, our economy will continue to face this pressure. As an economist, what fiscal and monetary solutions would you propose for 2024 to help sustain and regain economic growth momentum?

Assoc. Prof. Dr. Pham The Anh: The global economy faces many difficulties on its path to recovery due to adverse geopolitical factors, inflation, interest rates and higher financial risks. These factors also affect domestic economic growth, despite the advantages offered by free trade agreements and shifts in global investment flows.

With the global economy forecast to continue facing many difficulties, the Government should consider applying a number of fiscal measures, specifically changes to tax policy to improve the quality of growth.

Among these, the proposal to increase special consumption tax on certain products, such as liquor, beer and tobacco, is expected to help guide production and limit the use of products harmful to health, while demonstrating the Government’s commitment to sustainable development and social welfare goals.