Despite strong efforts and more positive signals recorded, Vietnam’s economic growth stood at only 3.72% in the first half of 2023, putting heavy pressure on the realisation of this year’s GDP growth target of 6.5%, said Deputy Minister of Planning and Investment Tran Quoc Phuong.

Addressing the Vietnam Wealth Advisors Summit 2023 in Hanoi on August 8, he said it is worrying that production and business activities in many sectors are struggling with difficulties. The resilience of enterprises has been eroded after the COVID-19 pandemic, and some of them have had to scale down operations and output.

Big challenges at present are related to the market, money flow, and administrative procedures, he pointed out, noting that capital costs are still high while enterprises still find it hard to access credit, issue corporate bonds, or sell stocks.

Outstanding credit during H1 increased by 4.28%, lower than the rise of 9.44% seen in the same period of 2022, statistics show.

Phuong noted that measures to speed up public investment disbursement, foster export, and stimulate consumption are being carried out strongly to fuel growth.

This is a “very heavy” task because the failure to achieve this year’s growth target will affect the implementation of the five-year plan for 2021 - 2025, the 10-year strategy for 2021 - 2030, and even the targets for 2030 - 2045 set in the resolution of the 13th National Party Congress.

It will be difficult to reach targets without breakthrough mechanisms and policies, he went on.

Given this, the Ministry of Planning and Investment has suggested the Government propose the Politburo amend and supplement some mechanisms and policies related to production, business, and investment such as those on the change of land use purposes, the use of local budgets to carry out the tasks and projects managed by ministries and central agencies in localities, and the increase of the proportion of State capital in public - private partnership projects.

These are urgent issues needing quick amendment and perfection to tackle bottlenecks and facilitate socio-economic development, the Deputy Minister emphasised.

At the event, Nguyen Anh Duong, head of the general research board at the Central Institute for Economic Management (CIEM), held that to boost economic growth, stabilising the macro-economy and controlling inflation remain important tasks, but more attention should be paid to removing obstables for enterprises.

In particular, it is necessary to improve their capital access and capital absorption capacity, better the business climate and labour productivity, and bravely issue regulations on pilot mechanisms for new economic models such as fintech and circular economy.

The Government should also effectively implement the free trade agreements Vietnam has joined and consider negotiating and upgrading some others, he recommended.

In addition, localities need to effectively attract and use foreign investment in the new context, Duong said, suggesting that they further open some fields to foreign investors, boost cooperation with other localities in FDI attraction, step up technology transfer from foreign firms, and increase training for labourers to meet FDI companies’ requirements.

For his part, Le Xuan Nghia, member of the National Advisory Council for Financial and Monetary Policies, perceived that the Vietnamese economy will record a U-shape recovery instead of fast recovery because the global economy is also rebounding gradually, the six-month foreign trade decreased but the decline has decelerated while some export sectors like electronics and agriculture are bouncing back well, and the service sector is also recovering relatively well.

He predicted that the economy will recover more observably in around the fourth quarter of 2023./.