The International Monetary Fund is projecting a growth rate of almost 6% for the Vietnamese economy in 2023, thanks to demand from abroad and direct foreign investment. However, this growth comes with challenges such as a real estate market disturbance, financial stress, and a sharp decline in exports. Despite these difficulties, experts predict that the Vietnamese economy will gradually recover from 2023 due to positive exports, tourism, and expansionary fiscal and monetary policies. The economic growth is forecasted to reach close to 6% in 2024, driven by strong external demand and stable foreign direct investment. However, risks remain high such as weakening exports due to global geopolitical tensions and domestic demand growth.
Inflation is expected to fluctuate around the State Bank’s target level of 4-4.5% this year due to exchange rate pressures under loose monetary conditions. If price pressures increase, the State Bank may need to tighten monetary policy. Fiscal policy is also supporting economic growth in 2024 by boosting public sector wages and public investment. To face future challenges, strengthening fiscal management and mobilizing budget revenue are crucial areas of focus.
This year has seen significant legal advancements from the regulatory agency particularly in the banking sector and real estate market. Laws around credit institutions and real estate have been amended aiming at resolving legal bottlenecks while promoting a healthy corporate bond market. Experts recommend further strengthening supervision and management of financial institutions, restructuring weak real estate development enterprises, and increasing investment in infrastructure to support economic growth.
In conclusion, despite facing challenges such as weakening exports due to global geopolitical tensions and domestic demand growth risks remain high for the Vietnamese economy in 2024. Strong external demand driven by stable foreign direct investment coupled with accommodative policies will drive economic recovery towards nearly 6%. Strengthening fiscal management and mobilizing budget revenue are key areas of focus for facing future challenges while experts recommend further strengthening supervision and management of financial institutions along with restructuring weak real estate development enterprises for sustained economic growth
