Vietnam News Today (Jan. 13): Sanguine Economic Outlook For Vietnam Ahead in 2024

Ambassador Le Thi Tuyet Mai, head of the Permanent Mission of Vietnam to the United Nations, WTO and other international organizations in Geneva (Photo: VNA)

PM to highlight Vietnam’s ideas, commitments in sustainable development at WEF-54: Ambassador

Prime Minister Pham Minh Chinh’s participation at the 54th Annual Meeting of the World Economic Forum (WEF-54) in Davos, Switzerland from January 16-18 will provide a chance for Vietnam to highlight ideas, commitment and solutions to realize the country’s strategy on sustainable socio-economic development and international integration, according to Ambassador Le Thi Tuyet Mai, head of the Permanent Mission of Vietnam to the United Nations, WTO and other international organizations in Geneva.

The Vietnamese Government leader will share Vietnam’s visions at the forum's main sessions, including a WEF Country Strategic Dialogue on Vietnam, a policy dialogue of Vietnam and a discussion with some ASEAN countries on promoting the role of global cooperation in ASEAN, the diplomat told Vietnam News Agency (VNA)’s correspondent in Geneva.

She said that PM Chinh will also join leaders of countries, international organizations and multinational businesses at a WEF session on recovering confidence in the global system.

The Vietnamese leader will address some other events, including a seminar on attracting investment in semiconductor industry, and another on experience and development models of international financial centers with the participation of leading Swiss financial groups, Ambassador Mai said.

PM Chinh will hold bilateral meetings with leaders of some countries and international organizations to discuss regional and international issues of shared concern, and strengthen connectivity with partners, cited VNA.

The diplomat stressed that the Vietnamese Government leader will directly tell leaders of states, international organizations and multinational enterprises about Vietnam’s efforts to renovate the growth model, promote green economy, reduce greenhouse gas emissions, speed up innovation and digital transformation on an equal and inclusive principle and enhance capacity to deal with climate change, showing the country’s determination and attempts to deliver on the commitment it had made at the 26th UN Climate Change Conference (COP26) to achieve net-zero emission by 2050.

The Vietnamese PM will have a meeting with WEF Founder and Executive Chairman Klaus Schwab, during which they will witness the signing of a memorandum of understanding on cooperation between Vietnam’s Ministry of Labor, Invalids and Social Affairs and WEF on developing innovation and green transition skills, and a deal between the People’s Committee of Ho Chi Minh City and WEF on collaboration in establishing a Fourth Industrial Revolution Center, Ambassador Mai revealed.

She underlined that these activities demonstrate Vietnam and WEF’s great attention to bilateral relations. Vietnam has highly valued the WEF’s role in the world and Vietnam, and stayed ready to promote ties with the forum. Meanwhile, WEF leaders have hailed Vietnam’s role and contributions in promoting multilateral cooperation, as well as the country’s efforts to join hands with the international community in dealing with global challenges, she noted.

Ambassador Mai said that the activities will also provide opportunities for Vietnam to prove its role as an active partner of the international community and its willingness to make contributions to the settlement of global issues, as well as efforts to shape the future by putting forth ideas and implementing policies to boost socio-economic development and improve people’s living conditions in the current important period.

The PM’s participation at the event will affirm the role, position and reputation of Vietnam in the world arena, the diplomat underlined.

Themed “Rebuilding Trust,” the WEF-54 will focus on four major issues – building economic policies to suit the new era, long-term strategy on climate, nature and energy, artificial intelligence as a motivation for socio-economic development, and security and cooperation in a divided world.

Sanguine economic outlook for Vietnam ahead in 2024: HSBC

Vietnam is seeing a glimmer of hope for better growth prospects going forward with the country’s GDP growth expected to accelerate 6.0% this year, according to HSBC's report “Vietnam at a glance”.

According to details set out in the report, despite rough waters, the country ended 2023 relatively optimistic that this year can see the nation emerge strongly from mounting challenges.

Vietnamese GDP growth rose to 6.7% on-year in the fourth quarter of last year, thereby lifting its yearly growth rate to 5.1%.

Experts point out that this is in line with their forecast of 5.0%, which they have maintained for more than six months, despite a downward revision to 4.6% among consensus.

The manufacturing sector is one of Vietnam's key growth engines, with this industry seeing a notable improvement in the second half following a period of extreme sluggishness in the first half, according to VOV.

Photo: VOV

Despite moderating significantly from its historical average, at an even slower rate than during the pandemic, manufacturing has shown positive signs of recovery. This is particularly evident in the electronics sector.

Indeed, the turn in the tech cycle has been quietly driving the recovery in Vietnamese exports. After enduring a double-digit fall in the first half, the nation has finally seen its exports grow close to double digits again in the fourth quarter, largely led by rising electronics shipments.

Aside from electronics, machinery shipments have also started to recover, with sustained double-digit growth in terms of Vietnamese booming agriculture exports.

In addition, the nation’s robust services continue to provide much-needed support to the economy. The sector expanded by over 7% year-on-year in the fourth quarter, mostly led by tourism-related sectors, including retail sales, transport, and accommodation.

As the northern hemisphere has entered winter, a significant number of tourists have flocked to the country’s variety of rich heritage sites, from the spectacular Ha Long Bay to the ancient town of Hoi An. The nation is now leading ASEAN with a recovery rate of 80% compared to 2019’s level.

Given these positive developments, Vietnam aims to lure 18 million tourists in 2024, up from 12.6 million in 2023, thereby paving the way for its full return to 2019’s level.

HSBC economists forecast that the country is ushering in a more hopeful Year of the Dragon due to sustained FDI inflows.

The country has been widely regarded as the main beneficiary of US-China trade tensions, a trend that continues. Both total and new FDI reached close to their respective historical highs in 2023, particularly with greenfield FDI jumping to a four-year-high of 5% of GDP.

Most notably, new manufacturing FDI soared to hit a new high of more than US$15billion, 80% of which is concentrated in the manufacturing space. This continues to put the nation in a leading position in ASEAN, just behind Malaysia.

With regards to the source of FDI, Japan and the Republic of Korea are both traditionally big investors in the Vietnamese market, but China has been expanding its FDI footprint quickly in the nation. In fact, 2023 marks the first time that mainland China recorded the largest share among investors.

Think tanks analyzed that despite a rosy picture, risks to trade and inflation warrant a closer look. As Vietnamese inflation remained under control in 2023, averaging 3.3%, it fell in line with expectations.

This leaves plenty of space below its inflation ceiling of 4.5%, with experts expecting inflation to remain benign in 2024, with a forecast of 3.4%, well below the new inflation target of 4% to 4.5%.

While maintaining an eye on upside risks to prices, they expect the SBV to keep its policy rate steady at 4.50% through the coming.

According to insiders, Vietnam is on track for recovery, likely returning to its trend growth of 6.0% this year. As FDI inflows continue to add production capacity, the Vietnamese manufacturing sector is experiencing the green shoots of a rebound, thereby bringing opportunities for its exports.

While it is key to watch how the minimum 15% corporate tax rate evolves, the impact should be manageable, they note.

Vietnam, Japan hold environmental policy dialogue

The eighth Vietnam - Japan environmental policy dialogue was held on January 12 in a hybrid format.

Deputy Minister Thanh highlighted the event's importance as the memorandum of understanding for cooperation that the two ministries signed in 2020 expired, saying that this is an opportunity for the two ministries to discuss to open up a new phase of cooperation in the environment, climate change, and plastic waste reduction.

Japanese State Minister Yagi said that the cooperation between the two ministries has achieved specific and practical results, especially in the field of environment and climate change adaptation, reported VNA.

Japan’s State Minister of the Environment Yagi Tetsuya, and Vietnamese Deputy Minister of Natural Resources and Environment Le Cong Thanh at the signing ceremony of MoU on environment between the two ministries. (Photo: baotainguyenmoitruong.vn)

Vietnam participated in the Joint Credit Mechanism proposed by the Japanese Government to implement bilateral cooperation with developing countries. To date, more than 40 projects related to the mechanism have been carried out in Vietnam, helping Vietnam raise its capacity to implement Article 6 of the Paris Agreement while promoting the process of reducing greenhouse gas emissions.

On collaboration in natural disaster mitigation, Deputy Minister Thanh said Vietnam is interested in devising solutions to a natural disaster early warning system, including a network of hydrometeorological monitoring stations. The Ministry of Natural Resources and Environment has encouraged Japanese businesses to join the hydrometeorological service market in Vietnam, Thanh said, adding that his ministry supports initiatives on early warning systems of the Japanese environment ministry.

Minister Yagi said his ministry is making efforts to apply measures on early warning in countries in the Asia-Pacific region via the public-private partnership.

In addition to cooperation in mitigating impacts of climate change, Vietnam is seeking Japan’s support in tackling pollution, particularly ocean plastic waste, electronic waste, expired solar panels, solid waste, and wastewater, along with air and water environment control.

Yagi affirmed that the Japanese Ministry of the Environment always stands ready to cooperate and accompany the Vietnamese Ministry of Natural Resources and Environment to carry out activities on environmental protection and climate change adaptation.

Hanoi named as Best Food Destination for 2024: Tripadvisor

Hanoi topped the list of the Best Food Destination 2024, as voted on by readers of the world's largest travel guidance platform TripAdvisor.

The capital successfully surpassed plenty of famous food destinations across the world such as Chiang Mai and Phuket of Thailand, Rome of Italy, Paris of France, and New Delhi of India to ultimately win the prize.

Along with sightseeing, the capital is also known for its rich and diverse range of culinary culture. Most visitors to Hanoi sample some of its famous dishes, such as beef pho, grilled pork with vermicelli, and Vietnamese baguettes, cited VOV.

Hanoi is named as Best Food Destination for 2024.

Other renowned dishes of Hanoi include banh cuon (rolled rice pancakes), ca phe trung (egg coffee), Cha Ca La Vong (Fish with dill & turmeric), Bun dau mam tom (Vermicelli with fried tofu and shrimp paste), along with Bun oc and Bun rieu (Snail noodle soup and crab noodle soup).

Rounding off the list of the top 10 Best Food Destinations 2024 were Crete of Greece, Cusco of Peru, Florence of Italy, Barcelona of Spain, New Orleans of the United States, Lisbon of Portugal, and Baku of Azerbaijan.

Bloomberg gives positive economic outlook for Vietnam in 2024

The website Bloomberg.com of the US on January 8 cited analysts' opinions, saying that the State Bank of Vietnam (SBV), among the first in Asia to lower borrowing costs in 2023, will likely keep its benchmark interest rate steady through next year as it tackles economic growth and inflation concerns.

Bloomberg's latest survey shows that the refinancing interest rate, currently at 4.5 percent, is seen to stay on hold through 2025, despite a rebound in gross domestic product growth backed by strong exports.

The rate was cut thrice between April and June last year to 4.5 percent from a peak of 6 percent. In a previous survey, economists had expected a further 50 basis points of cuts during January-March.

Analysts also raised their headline inflation forecasts for 2024, expecting price gains at 3.6 percent this quarter and 4.05 percent in the next (up from 2.9 percent and 3.3 percent in the first quarter of 2023 and the second quarter of 2023, respectively).

Besides, they expect the annual inflation to average a faster 3.5 percent this year from 3 percent earlier before easing to 3.2 percent in 2025. The 2024 level is still below the government's 4-4.5 percent target, VGP reported.

Container warehouse at Tan Vu port (Hai Phong). Photo: VNA

According to Bloomberg, the SBV will likely keep the policy interest rate unchanged in the coming time. This means that the heavy lifting of returning economic growth to above 6 percent by attracting investors and encouraging spending - will be left to the government.

According to Bloomberg's survey, the Vietnamese economy is likely to grow 6.3 percent in the first quarter and 6.5 percent in April-June. Vietnam's GDP growth is forecast at 6 percent for this year and 6.4 percent next year.

Han Teng Chua, an economist at DBS Bank Ltd, said Vietnam's economy has been recovering, adding that foreign direct investment will likely remain forthcoming. Vietnam stays attractive over the coming years as companies diversify and derisk their supply chains by expanding into Vietnam.

Competitive wage costs, a vast network of trade agreements and a supportive business environment are critical advantages for the Vietnamese economy.

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