The Vietnamese economy is expected to experience a higher growth rate in 2024 compared to the previous year, according to Andrea Coppola, the lead economist for the World Bank in Vietnam. Despite the challenges posed by the global economic slowdown and its impact on the demand for Vietnamese exports, Vietnam has shown resilience and is gradually recovering.
In an interview with Nguyen Dat of VIR, Coppola assessed Vietnam’s economic performance in 2023, stating that it was a difficult year but still positive considering the challenging global context. The reliance on demand from trade partners made Vietnam vulnerable to the global economic slowdown, resulting in the least strong economic performance since the late 1990s.
Although many Vietnamese businesses faced difficulties in 2023, there were two main causes. The first was the external factor of the global economic slowdown, which affected firms in the manufacturing sector heavily reliant on exports. The second cause was domestic, as the challenging situation experienced by Vietnamese workers led to a deceleration of domestic consumption, affecting various sectors of the economy.
However, Vietnam’s performance did not go unnoticed by the international community. Despite the negative shock of the global economic slowdown, Vietnam managed to sustain a growth rate that many other countries could only dream about. The country attracted attention as an appealing destination for international investors due to its economic and political stability, as well as its integration into the global economy. This was highlighted in articles published by media outlets with global reach and through visits by world leaders to Vietnam.
Looking ahead to 2024, the international context is expected to remain challenging. Global economic growth is projected to decelerate further, including in key trade partners such as the United States. External risks, such as geopolitical risks and conflicts impacting energy prices, along with weak activity in China, contribute to the expected weak performance.
Despite these challenges, Coppola believes that a GDP growth target of 6-6.5% for 2024 is ambitious but achievable. To reach this target, Vietnam needs to focus on reducing its vulnerability to external shocks and leveraging its internal strength and domestic productivity. Authorities have a crucial role to play by supporting the economy through fiscal policy, particularly by accelerating the implementation of public investment and infrastructure projects.
Coppola emphasizes that the Vietnamese people are the country’s greatest source of internal strength. To sustain fast growth, promoting private sector development and boosting productivity are essential. He recommends doubling efforts in human capital development and physical capital development through upskilling the labor force and investing in transport and energy infrastructure.
In conclusion, Vietnam faced economic challenges in 2023 due to the global economic slowdown, but it still managed to maintain relatively fast growth rates. The international community recognized Vietnam’s performance and potential, making it an attractive destination for investors. As Vietnam enters 2024, it will continue to navigate a challenging global context but has opportunities to promote growth by focusing on its internal strengths and addressing barriers hindering economic development.
