Efficiently harnessing internal resources creates a breakthrough for the economy in 2024

Boosting domestic consumption is a focal point to promote growth in 2024. Photo: S.T.

2024 is the year of economic recovery

In 2024, the global economy is forecasted to recover and have "soft landings," but still harbors many risks and challenges.

"In that context, Vietnam's open economy will undoubtedly be directly impacted. However, with strong resilience, the 2023 growth rate reached 5.05%, making Vietnam continue to be a bright spot in the region and the world. This is considered a positive signal compared to large open economies that rely on exports, such as Thailand and Malaysia," said Shantanu Chakraborty, Country Director of the Asian Development Bank in Vietnam.

While forecasts for global economic growth and major economies are cautious and lower than in 2023, Vietnam continues to set a growth target for 2024 at 6-6.5%. The economy in 2024 is expected to show vitality thanks to the foundation from 2023 as well as policies and solutions from the Government, ministries, and sectors for financial markets, banking, bonds, and real estate.

Dang Nguyet Minh, Director of the Research Department at Dragon Capital Investment Fund, evaluated that the world had gone through an inventory reduction cycle. Dragon Capital's monitoring showed that the inventory index of manufacturing in Europe and the Americas, as well as the retail inventory index globally, has returned to sustainable levels. Therefore, it can be expected that the bottom of Vietnam's production base has passed, and 2024 is the year of economic recovery.

"The trend of capital flows from foreign direct investment (FDI), as well as indirect investment in the Vietnamese stock market in 2024, will be stronger and clearer. For the export sector, the export bottom has passed, and we are starting a new recovery cycle. Public investment is a driving force and confidence for businesses to invest again. Therefore, the Government has been determined to boost public investment. As for consumption, we may have to wait for the lag in interest rates, so the second half of 2024 will see more positive recovery," added Minh.

According to Dorsati Madani, a senior economist at the World Bank (WB) in Vietnam, in Vietnam, they see that private investment is very low. Along with that is the trend of slowing consumer spending. These are factors that take time to recover. Additionally, the real estate market also faces many difficulties. Therefore, there needs to be many policies to support these areas.

Also, according to Dorsati Madani, Vietnam needs to change to revive the private economy, along with gradually restoring domestic consumer spending. In addition to international trade, domestic trade also needs to be promoted. In the future, commodity prices may not increase, and in some cases, the prices of some items may decrease, and inflation in Vietnam and the world will decrease. These factors will change the economic outlook of Vietnam and the world.

Seizing opportunities to create new breakthroughs

According to Andrea Coppola, Chief Economist of the World Bank in Vietnam, as global economic growth is expected to continue to slow down in 2024, the GDP growth target of 6-6.5% next year will be very challenging. "Prospects for Vietnam's export demand may gradually improve, while domestic consumption and investment accelerate even more. Vietnam needs to continuously extend additional support policies to the economy, through fiscal policy, by speeding up the pace of infrastructure investment and public investment projects to promote short-term and long-term economic growth," commented Coppola.

Assessing opportunities for economic growth in 2024, Prof. Dr. Hoang Van Cuong, a member of the Hanoi City People's Council, believed that Vietnam hasd many new opportunities, but in the context of relying on the global economy or export resources, it is difficult to go against the general trend. Therefore, it is necessary to efficiently exploit internal resources, and how to turn that into a real driving force for growth to rise. Simultaneously, specific actions are needed to "seize" huge opportunities that are opening up, such as green transformation and digital transformation. These factors will bring about fundamental changes in the structure of the economy.

Among the important growth drivers, Cuong believed that we could not ignore the recent clear determination of the Party, the National Assembly, and the Government to focus efforts to support businesses, with the determination to create new development steps in 2024.

"2024 is probably a rare opportunity that will not be repeated if investors do not seize it. If not, we may lose opportunities, and investors will not be able to convert into high-value manufacturing industries and high-value value chains. I think this requires action from the Government to businesses and investors," affirmed Cuong.

Another important factor that Cuong believed needs attention is promoting domestic consumption. Vietnam has a not-so-small domestic consumer market of 100 million people. This creates opportunities for resources, especially increasing integration opportunities.