On April 17, 2024, National Economics University (NEU), in collaboration with the Party Central Committee’s Economic Commission and the National Assembly’s Economic Committee, took the lead in organizing the national scientific conference on “Vietnam’s Economy in 2023 and Outlook for 2024: Stimulating Aggregate Demand for Economic Growth in a New Context” and launched the Vietnam Annual Economic Review 2023.

An overview of the conference

Attending the conference from outside the University were Nguyen Duc Hien, Deputy Head of the Party Central Committee’s Economic Commission; Nguyen Minh Son, Vice Chairman of the National Assembly’s Economic Committee; Pham Van Linh, Vice Chairman of the Central Theoretical Council; Nguyen Van Thanh, Vice Chairman of the Central Theoretical Council; Pham Thi Hong Yen, Standing Member of the National Assembly’s Economic Committee; Nguyen The Ngan, Director of the Department of Finance and Monetary Affairs, Ministry of Planning and Investment; Le Trung Hieu, Deputy Director General of the General Statistics Office; and leadership representatives from the Ministry of Finance, the State Bank of Vietnam, the Ministry of Industry and Trade, the Ministry of Natural Resources and Environment, the Government Office, and other agencies.

Experts participating in the roundtable discussion included Phan Duc Hieu, Standing Member of the National Assembly’s Economic Committee; Dr. Can Van Luc, Chief Economist and Director of the BIDV Training and Research Institute; Dr. Dang Duc Anh, Deputy Director of the Central Institute for Economic Management; Nguyen Ba Hung, ADB Chief Economist in Vietnam; and Assoc. Prof. Dr. Vu Sy Cuong of the Academy of Finance.

Representing universities and research institutes were Assoc. Prof. Dr. Dao Ngoc Tien, Vice President of Foreign Trade University; Assoc. Prof. Dr. Nguyen Thanh Phuong, Deputy Director of the Banking Academy; Assoc. Prof. Dr. Nguyen Manh Thieu, Deputy Director of the Academy of Finance; Assoc. Prof. Dr. Nguyen Trong Nguyen, Director of the Academy of Policy and Development; Dr. Pham Thi Anh Nguyet, Vice Rector of Thai Binh University; Assoc. Prof. Dr. Nguyen Chien Thang, Director of the Institute for European Studies, Vietnam Academy of Social Sciences; Dr. Nguyen Nhu Quynh, Director of the Institute of Financial Strategy and Policy; Assoc. Prof. Dr. Ngo Tuan Nghia, Director of the Institute of Political Economy; Dr. Phi Vinh Tuong, Director of the Institute of World Economics and Politics; and leadership representatives from universities and research institutes.

Economists attending included Le Dang Doanh, former Director of the Central Institute for Economic Management; Nguyen Dinh Cung, former Director of the Central Institute for Economic Management; Le Xuan Ba, former Director of the Central Institute for Economic Management; Pham Chi Lan, economist; Vu Tien Loc, Chairman of the Vietnam International Arbitration Center and Member of the National Assembly; Assoc. Prof. Dr. Bui Quang Tuan, former Director of the Vietnam Institute of Economics; and economists from research institutes and universities.

International delegates included Shantanu Chakraborty, Country Director of the Asian Development Bank (ADB) in Vietnam; Dorsati Madani, Senior Economist at the World Bank; Gulmira Asanbaeva, Senior Economist at the International Labour Organization (ILO); Mang Kinal, First Secretary and Counselor of the Cambodian Embassy; and Dang Van Linh, Head of the Science and Technology Division, Taipei Economic and Cultural Office (TECO).

Representing NEU were Prof. Dr. Pham Hong Chuong, President of NEU; Prof. Dr. Tran Tho Dat, Chairman of the Science and Training Council; Assoc. Prof. Dr. Nguyen Thanh Ha, Chairman of the Advisory Council; Prof. Dr. To Trung Thanh, Head of the Department of Research Management; leadership representatives from departments, faculties, schools, institutes, and centers; leaders of units and divisions; and a large number of the University’s faculty, staff, and students.

Prof. Dr. Pham Hong Chuong, President of NEU, delivers remarks.

In his opening remarks, Prof. Dr. Pham Hong Chuong, President of NEU, noted that, with its tradition as one of the leading centers for research and advice on socioeconomic development strategies and policies for the Party and the State, NEU has made considerable efforts to help address key issues facing the national economy.

The annual national conference, jointly organized by NEU, the Party Central Committee’s Economic Commission, and the National Assembly’s Economic Committee, is one of the University’s most important academic events, providing an overview of the economy and assessing the country’s economic prospects for the years ahead.

Reviewing the economic landscape of the past year, Prof. Dr. Pham Hong Chuong observed that 2023 was considered one of the most difficult years for Vietnam’s economy in recent years, particularly as it faced numerous risks and uncertainties in the international environment arising from weakening global growth, persistently high global inflation, monetary tightening in many countries, and rising geopolitical tensions. Vietnam’s growth rate in 2023 remained far below pre-COVID-19 levels. Most notable were the weakening of aggregate demand and its key components, such as consumption and investment, and, in particular, the lack of improvement in the quality of growth.

Prof. Pham Hong Chuong emphasized: “Aggregate demand plays an important role in determining the level of economic activity and employment in the economy. A decline in aggregate demand indicates that the economy is at risk of recession. This seriously affects overall economic growth, causing consequences such as declining production, rising unemployment, and falling household incomes and spending. Therefore, restoring aggregate demand is an important task for Vietnam, requiring the Government and relevant ministries, commissions, and agencies to urgently take appropriate, timely, and adequately scaled measures to strengthen demand-side growth drivers, thereby restoring aggregate demand and developing the economy in a new context.”

“Maintaining macroeconomic stability and proactively restoring and sustainably stimulating aggregate demand not only help build a firmer foundation for a self-reliant economy but, importantly, also strengthen resilience to external ‘shocks,’ which is vital in today’s complex context. In addition to providing an overall assessment of the economy, the national scientific conference on ‘Vietnam’s Economy in 2023 and Outlook for 2024: Stimulating Aggregate Demand for Economic Growth in a New Context’ will focus on discussing the components of aggregate demand with the aim of restoring aggregate demand and economic growth. The conference’s outcomes will provide an important basis for recommendations on economic growth in a new context. We believe that, through papers presented by economists, as well as contributions, analyses, and assessments from scholars and representatives of ministries, commissions, agencies, associations, and businesses, the conference will be a success and deliver substantial practical value. A range of recommendations will be distilled for submission to the National Assembly and the Government on policy directions and solutions to promote sustainable economic growth in a new context,” said Prof. Dr. Pham Hong Chuong.

Dr. Nguyen Duc Hien, Deputy Head of the Party Central Committee’s Economic Commission, delivers remarks.

Highlighting the challenges, Dr. Nguyen Duc Hien, Deputy Head of the Party Central Committee’s Economic Commission, said that the sharp decline in aggregate demand had created difficulties for Vietnam’s economy, as all three components—investment, exports, and consumption—had weakened.

Specifically, total realized investment across the economy in 2023 at current prices increased by only 6.2% over the previous year, compared with an 11.2% increase in 2022. Within state-sector investment, realized investment funded by the state budget in 2023 reached only 85.3% of the annual plan and rose by 21.2% over the previous year.

Realized investment from the non-state sector increased by only 2.7%, far below the 8.9% increase in 2022. Similarly, realized foreign direct investment (FDI) in Vietnam in 2023 rose by only 5.4%, compared with 13.9% in 2022.

Meanwhile, spending momentum also tended to weaken. For 2023 as a whole, total retail sales of goods and consumer service revenue increased by only 9.6%, compared with 20% in 2022; declining household incomes led to lower consumer demand for goods.

Data for 2023 show that final consumption increased by only 3.52% over the previous year, compared with 7.09% in 2022. In tourism services, despite efforts to attract international visitors back to Vietnam, international arrivals in 2023 were estimated at 12.6 million, 3.4 times the previous year’s figure but still only 70% of the level in 2019, before the COVID-19 pandemic.

“In international trade, financial issues in Europe and the United States, such as public debt and rising interest rates, have contributed to constraining the economy and reducing global aggregate demand, significantly affecting countries with export-led growth strategies such as Vietnam,” stated Nguyen Duc Hien, Deputy Head of the Party Central Committee’s Economic Commission.

Prof. Dr. To Trung Thanh, Head of the Department of Research Management and co-editor of the publication, presents the contents of the Vietnam Annual Economic Review 2023: Stimulating Aggregate Demand for Economic Growth in a New Context.

For 2023 as a whole, export and import values both fell sharply from the previous year, declining by 4.4% and 8.9%, respectively, as demand weakened across Vietnam’s major markets, including the United States, the Association of Southeast Asian Nations (ASEAN), the European Union (EU), and several East Asian countries.

Export volume to the U.S. market recorded the steepest decline, at 11.6%, while import volume from South Korea fell by 15.5%, the largest drop among major markets. This caused output of several key Vietnamese industrial products to fall sharply compared with 2022.

Shantanu Chakraborty, Country Director of the Asian Development Bank (ADB) in Vietnam, presents a paper on international experience in aggregate demand management and lessons for Vietnam in a new context.

Dorsati Madani, Senior Economist at the World Bank, presents a paper on international experience in aggregate demand management and lessons for Vietnam in a new context.

According to Dorsati Madani, Senior Economist at the World Bank (WB), Vietnam’s GDP growth slowed in 2023, and despite a gradual recovery in the first quarter, many indicators pointed to an uneven recovery in early 2024. Madani also noted that the risks facing Vietnam’s economy were balanced against its prospects. Global risks remained evident, while the pace of recovery in the domestic real estate market and unresolved financial sector vulnerabilities remained concerns. Nevertheless, stronger external demand and lower global interest rates offered growth opportunities. The WB economist therefore expected economic activity to begin strengthening in the second half of 2024, supporting projected growth of 5.5% in 2024 and 6% in 2025.

Dr. Can Van Luc, Chief Economist of BIDV and Director of the BIDV Training and Research Institute, presents a paper on promoting private investment as an important driver of aggregate demand and economic growth.

Analyzing the effectiveness of policies supporting growth over the past year, Prof. Dr. To Trung Thanh, Head of the Department of Research Management at National Economics University (NEU), speaking on behalf of the research team, noted that monetary policy had limited effectiveness, alongside signs of deteriorating health in the financial and monetary system. According to Prof. Dr. To Trung Thanh, monetary policy in 2023 was considered flexible in its adjustments to credit growth targets and its four interest rate cuts. However, credit growth remained below target, while lending rates declined by less than deposit rates.

Prof. Dr. To Trung Thanh explained that weak demand in the economy had reduced the capacity of economic sectors to absorb capital. However, this also reflected the many bottlenecks remaining in the financial and monetary system—the transmission channel for monetary policy—as demonstrated by three main points.

First, despite efforts to improve commercial banks’ capital adequacy ratios, their capital buffers remained relatively thin compared with international standards and those of countries in the region.

Second, regarding asset quality, economic difficulties and a subdued real estate market had driven up nonperforming loan ratios across most loan categories. The on-balance-sheet nonperforming loan ratio stood at nearly 5%, reflecting signs that economic difficulties were spreading to the financial and monetary sector.

Third, maturity mismatches were a major bottleneck. Short-term deposits accounted for over 80% of banks’ total funding, while medium- and long-term lending accounted for nearly 50%.

In addition, capital markets, including the bond and stock markets, faced numerous problems that unsettled investor sentiment. Demand for medium- and long-term capital continued to place the burden on the commercial banking system, further increasing maturity and liquidity risks.

“Fiscal policy faces a dilemma, with no longer much room to stimulate the economy. Budget revenue as a share of GDP is shrinking, yet we want both to expand spending and to cut taxes to support economic growth, which could increase borrowing risks,” Prof. Dr. To Trung Thanh said.

Recalculations of budget deficit ratios from 2019 onward show that budget deficits have increased in recent years, although public debt remains under control. Clearly, some fiscal policy space remains to support growth, but it is limited. According to the NEU representative, with no substantive improvement in the economic model, achieving a high growth target as early as 2024—in the short term—will require the Government to rely on demand-side policies to rapidly revive consumption, investment, and exports.

In 2024, fiscal policy must continue to take the lead and provide more focused, targeted support, with monetary policy playing a supporting role. In addition, as difficulties in the business sector currently make a sharp increase in private investment unlikely, effective disbursement of public investment capital plays a pivotal role. Over the long term, however, the economy cannot rely on public investment. Measures are needed to improve the investment environment and unlock private investment resources so that they become the main and most important driver of growth.

The roundtable discussion features speakers representing central commissions, ministries, and agencies, international and domestic economists, and business representatives.

The conference also featured a roundtable discussion with speakers representing central commissions, ministries, and agencies, international and domestic economists, and business representatives. The lively and engaged discussion provided a comprehensive picture of Vietnam’s economy from macroeconomic and microeconomic perspectives, offering rich, diverse, multidimensional information with substantial scholarly depth.

Nguyen Minh Son, Vice Chairman of the National Assembly’s Economic Committee, delivers closing remarks at the conference.

In his closing remarks, Nguyen Minh Son, Vice Chairman of the National Assembly’s Economic Committee, affirmed that the useful information shared at the conference, together with clear and specific solutions and recommendations, would provide important reference materials for relevant agencies to study during policymaking and state management.

Earlier, as part of the conference, NEU held a press conference to launch the Vietnam Annual Economic Review 2023, themed “Stimulating Aggregate Demand for Economic Growth in a New Context,” to discuss and answer questions from the press on related issues.

Prof. Dr. Pham Hong Chuong, President of NEU, and Prof. Dr. To Trung Thanh, Head of the Department of Research Management, co-editors of the publication, introduce and discuss the publication at the press conference.

Some photos from the program:

Article and photos: Department of Communications

News agencies and media outlets reporting on the conferences:

VTV1 Television (at 19 minutes 15 seconds)

National Assembly Television: Vietnam’s Economy to Recover More Slowly Than Expected in 2024

Nhan Dan Television: Stimulating Aggregate Demand for Economic Growth in a New Context

Vietnam News Agency Television: Promoting Economic Growth by Restoring Aggregate Demand

VTC Television: Promoting Economic Growth by Restoring Aggregate Demand

Hanoi Television (at minute 08)

CafeF: Not Public Investment: Expert Identifies the Factor That Will Become the Main Long-Term Growth Driver for Vietnam’s Economy

Vneconomy: Fiscal Policy Remains a Pillar of Aggregate Demand, Returning the Economy to a High-Growth Trajectory

The Saigon Times: Prof. Dr. To Trung Thanh: Thinking in the Right Direction About Public Investment

Dai Bieu Nhan Dan: National Economics University Launches the Vietnam Annual Economic Review 2023

Nhan Dan: Stimulating Aggregate Demand for Economic Growth in a New Context

Savings Interest Rates Forecast to Rise, Exchange Rates to Fluctuate but Remain Under Control

Vietnam Financial Times: With Aggregate Demand Declining, Growth May Not Truly Reflect the Economy’s Health

Focus on Stimulating Aggregate Demand for Faster Economic Recovery

Vietnam News Agency: Stimulating Aggregate Demand for Economic Growth in a New Context

Lao Dong: Despite Generating the Highest Added Value, the Private Sector Faces the Greatest Difficulties

VTC News: National Economics University Launches Annual Economic Report

Banking Times: Stimulating Aggregate Demand to Provide a Foundation for Economic Growth

Business Forum: Restoring Aggregate Demand Is an Important Task

Communist Party of Vietnam Online Newspaper: “Stimulating Aggregate Demand for Economic Growth in a New Context”

Government Online Newspaper: Stimulating Aggregate Demand and Maintaining Macroeconomic Stability to Promote Growth

Industry and Trade Newspaper: Stimulating Domestic Aggregate Demand to Sustain Economic Growth in 2024

Tin Tuc Newspaper: Stimulating Aggregate Demand for Economic Growth in a New Context

Corporate Finance Magazine: Stimulating Aggregate Demand and Economic Growth in a New Context

Customs: Private investment needs to become the primary and most important driver of growth

Vietnam Finace: ‘The private sector generates the highest added value but faces the greatest difficulties’

Vietnam Law: Stimulating aggregate demand for economic growth

Finance Magazine: Stimulating aggregate demand for economic growth in a new context

Vnbusiness: Credit is ‘warming up’ again, but does the 15% growth target remain a challenge?

Expert: Gold auctions are only a stopgap solution; allowing gold imports is key

The private sector, not public investment, will be the main driver of economic growth in the long term

Financial and Monetary Market: Stimulating aggregate demand for economic growth in a new context

Tien Phong: Do not let the private sector be sidelined or fall out of step (Page 5)

CafeBiz: Not public investment: An expert identifies the factor that will become the main driver of Vietnam’s economic growth in the long term

Tax Magazine: Aggregate demand needs to be boosted to stimulate economic growth in a new context

Industry and Trade Magazine: Fiscal policy and the promotion of private investment are important drivers of economic growth

Marketplace Magazine: Consumption growth shows signs of slowing and instability

Enterprise & Investment Magazine: Vietnam should not be pessimistic about the global economic outlook and needs to continue policies that promote recovery

Ho Chi Minh City Law Newspaper: Investment, exports and consumption all weaken

Law & Society Newspaper: Restoring aggregate demand for economic growth in 2024

Young Entrepreneurs: Countercyclical fiscal policy and private investment will be the main drivers of growth

Monetary Security: Not public investment: An expert identifies the factor that will become the main driver of Vietnam’s economic growth in the long term

Social Insurance Magazine: Stimulating aggregate demand for economic growth in a new context

Central Economic Commission website: Nguyen Duc Hien, Deputy Head of the Central Economic Commission, chairs and speaks at the conference “Vietnam’s Economy in 2023 and Outlook for 2024: Stimulating Aggregate Demand for Economic Growth in a New Context”

This is an automated translation. If you notice any errors, please contact the Department of Communications, National Economics University at phongtruyenthong@neu.edu.vn.