At the government’s November regular press conference, Deputy Minister of Planning and Investment Tran Quoc Phuong said previously the task of stabilizing macro economy was always top priority, but in 2024, the priority will be given to economic growth stimulation, rather than macroeconomic stabilization.

As such, policy makers won’t be overly cautious when designing monetary policy and other solutions aiming at maintaining macroeconomic stability while neglecting to foster economic growth.

The government in 2023 issued many resolutions and measures to stimulate economic growth, but the desired goals were unattainable. 

In 2023, the macro economy was stable and still under control. Despite a lot of measures implemented, the GDP growth rate was estimated at just 5-5.2 percent, lower than the targeted 6.5 percent and the 8.02 percent growth rate in 2022.

However, analysts commented that 5 percent is still an encouraging result for Vietnam amid the world’s gloomy economy with a modest growth rate of 3.1 percent.

The excessive cautiousness in the management of major sectors has been cited as a reason behind the modest growth rate. In addition, the gloom of the world’s economy which led to weaker demand had considerable adverse impact on Vietnam’s economy. 

That was why import-export turnover in the first 11 months of 2023 was $600 billion, down 8.3 percent compared with the same period 2022.

Meanwhile, the domestic real estate market was quiet, and many businesses lost liquidity and had to downsize their workforce. The corporate bond and stock markets remained in difficulties and businesses' confidence declined.

A number of state-owned enterprises (SOEs), using huge state capital, performed badly in 2023 and took a loss, which not only impacted the national economy, but also affected investment attraction, technology renovation and green development.

Meanwhile, unreasonable regulations and complex administrative procedures posed barriers to businesses which were hesitant about investing to scale up their business. 

Many solar power projects were left idle after completion and investors have fallen into dilemma because they could not sell electricity, and now don’t have money to pay bank debts.

Some renewable energy projects that have been connected to the grid were also treated arbitrarily and inconsistently when the Electric Power Trading Company issued three official documents proposing lowering the power purchase prices, though the documents were removed later.

Many real estate projects have been suspended, and many renewable energy projects have been postponed. This is the result of changing policies, overlapping and inconsistent policies.

To turn the 6-6.5 percent growth rate target in 2024 into reality, it is necessary to remove these obstacles. 

First of all, Vietnam needs solutions on economic restructuring, with focus on the adjustment of the investment structure in all business fields.

The capital from the state budget needs to be designed in a way to help attract investments from society so as to mobilize more resources for development and investment efficiency improvement.

The economic growth also depends on public investments. The slow disbursement which occurred in many business fields in 2023 must be settled in 2024.

As for SOEs, it is the right time to separate their two functions – doing business for profit and for social security. SOEs must operate under market rules, rather than relying on the state’s resources and calling for help when they meet difficulties.

There should be reasonable policies to ensure that the growth targets and commitments are implemented, and to encourage businesses and investors to take action.

Regarding solar power projects that have been completed but not yet to be connected with the national grid, they should be put into use. Also, encouraging businesses to install self-production and self-consumption rooftop solar power systems is a solution for Vietnam to implement its commitments on zero percent emissions made at COP26.

Private businesses need capital to continue to operate and expand their scale, so monetary policy always plays a very important role. Lower interest rates are needed at commercial banks.

Tran Van Trai