Overcoming the fluctuations from the global economic landscape and internal constraints in 2023, Vietnam's economy continued its trajectory of recovery, with inflation kept under control and key balances safeguarded.

Positioned among the economies with the highest GDP growth rates in both the regional and global context, Vietnam's economic performance in 2023 has set a promising stage for further advancements.

In 2024, Vietnam cannot escape the impacts of global challenges and domestic constraints. However, the signs of economic recovery are becoming increasingly evident. The revival is being driven by various factors, including the global shift in supply chains and investment flows, the reopening of the Chinese market, significant growth in services and consumption, robust public investment, ample room for operating fiscal and monetary policies.

The National Assembly has aimed for a GDP growth rate between 6% and 6.5% this year, reflecting an optimistic assessment of the recovery prospects. 2024 is considered a breakthrough year in the 2021-2025 period, prompting the government, ministries, localities, and relevant agencies to exert maximum efforts toward the set target.

Numerous reputable international organisations have expressed high regard for Vietnam's achievements and prospects, predicting a rapid economic recovery in the time to come. Vietnam has consistently climbed the World Intellectual Property Organization (WIPO)’s global innovation ranking, rising from the 59th place in 2016 to 46th in 2023. Fitch Ratings, a renowned credit rating agency, meanwhile, upgraded Vietnam's long-term national credit rating to BB with a "stable" outlook.

According to the International Monetary Fund (IMF) forecast Vietnam's 2024 growth at approximately 5.8%, doubling the world average and being among the top 20 economies with the highest growth rates in the world.
Meanwhile, the Asian Development Bank forecasts a 6% GDP growth for Vietnam this year. The Southeast Asian economy is expected to remain resilient and recover swiftly in the near future, driven by strong domestic consumption and supported by moderate inflation, accelerated disbursement of public investment, and improvements in trade activities.

A more in-depth analysis of the economic growth drivers in 2024 by Deputy Minister of Planning and Investment Tran Quoc Phuong revealed that the overall economic growth at the end of 2023 was fundamentally positive. Despite not meeting lofty expectations, given the current international and regional context, such results provide a solid foundation for pursuing the goals and tasks set for the current year. Furthermore, favourable opportunities for growth have been noticed for the country’s investment, exports, and consumption throughout 2024.

PM urges agriculture sector to promote digital and green transformation

Prime Minister Pham Minh Chinh urged the agriculture and rural development sector to focus on innovation, speed up digital and green transformation and promoting the development of circular economy, knowledge economy, and sharing economy, towards realising the goal of ecological agriculture, modern rural areas and civilised farmers.

Addressing a conference of the Ministry of Agriculture and Rural Development (MARD) to review the sector’s operation in 2023 and launch its tasks in 2024 on January 3, the PM praised the agriculture sector for its success in overcoming challenges, thus reaping outstanding results such as setting new records in the export of vegetables and fruits and rice, contributing to affirming its increasingly important role and position. 

The PM asked the sector to set higher targets for 2024, striving for a growth rate of 3.5-4% and at least 55 billion USD in export revenue of agro-fishery-forestry products. 

The MARD should promote the restructuring of agricultural production based on main groups of products, fields and regions while seeking suitable and effective production models in connection with digital transformation and digital economy, he said. 

Besides, the Government leader required the ministry to exert utmost efforts to have the European Commission (EC)'s "yellow card" against Vietnamese seafood exports removed as soon as possible, adding that localities must have plans to create livelihoods for fishermen and provide them with legal education for the benefit of themselves, as well as their responsibilities and obligations to the nation and the international community.

Participants shared their localities’ agriculture production orientations in 2024, stressing that localities will concentrate on defining pillar industries, re-organising specialised areas-based production, building large raw material areas to attract businesses’ investment and promoting production associated with environmental and ecological protection.

It was reported at the conference that the agricultural sector posted a GDP growth rate of 3.83% in 2023, a record for many years, contributing to the 5.05% growth of the national economy and affirming its important role as the pillar of the economy, ensuring food security and helping stabilise the macro economy. 

The sector earned over 53 billion USD from exports with a record trade surplus of 12.07 billion USD. 

The building of new-style rural areas has reaped significant outcomes, with 6,370 out of the total 8,167 communes nationwide, 270 district-level localities and five provinces meeting new-style rural area standards. 

Deputy Minister of Agriculture and Rural Development Phung Duc Tien affirmed that the agricultural sector will continue to promote the shift from agricultural production to an agricultural economy, from single-sector development to multi-sector cooperation and development, and from the development of farm produce supply chains to commodity chains.

The sector set a target to expand its GDP growth by 3-5% in 2024, and earn 54-55 billion USD from exporting agro-forestry-aquatic products, Tien said.

Hung Yen province aims to lure 600 million USD in FDI

The northern province of Hung Yen expects to attract 600 million USD in foreign direct investment (FDI) to its industrial parks this year.

Permanent Vice Chairman of the provincial People’s Committee Nguyen Le Huy said to achieve the target, the locality will continue its support to businesses, focusing on organising meetings and investment promotion conferences with investors from the Republic of Korea, Japan, the US and Europe, thus luring big groups and projects with cutting-edge technologies, and joining global value chains.  

Hung Yen will also step up digital transformation and publicise information about land planning, industrial development planning, land price and compensation for site clearance, while speeding up the implementation of industrial parks, and approved social and worker housing projects, the official continued.

Director of the provincial Department of Planning and Investment Trinh Van Dien noted that Hung Yen has worked to improve its investment environment and provincial competitiveness index, and set up specialised groups to evaluate the operation of businesses and production facilities, helping them remove obstacles.

Besides, the province has paid attention to high-quality personnel development to satisfy requirements of spearhead economic sectors, as well as digital transformation, he added.

According to the provincial Statistics Office, Hung Yen counts 543 FDI projects worth nearly 7 billion USD, of which 172 projects valued at 3,8 billion USD have been run by Japan – its biggest investor.

Thai Nguyen strives to attract 500 million USD of FDI in 2024

The northern province of Thai Nguyen strives to attract 15 new projects to its industrial zones, 500 million USD of foreign direct investment (FDI) and 4.5 trillion VND (over 184.4 million USD) of domestic direct investment (DDI) in 2024, according to the province’s Industrial Parks Management Board.

According to head of the management board Le Kim Phuc, to achieve the targets, the board will focus on removing bottlenecks in land clearance work, continuing infrastructure development projects in industrial parks, and strengthening dialogues with enterprises.

The board will closely coordinate with investors of IP infrastructure projects and investment consulting organisations to renew investment promotion activities. It will also contact and attract strategic investors in potential areas like the semiconductor industry, electronics, and high technology.

The management board and local authorities will continue to enhance administrative reforms, and improve the provincial business and investment environment, he added.
In 2023, the board issued 48 new investment registration certificates to 38 FDI projects and 10 DDI projects with a total registered investment capital of 225.8 million USD and more than 1 trillion VND respectively.

The board also adjusted the investment registration certificates for 121 projects, of that, 23 projects had their total investment capital increased by more than 190 million USD and 997 billion VND.

Thus, in 2023, industrial parks in the province attracted more than 417 million USD, nearly 40% higher than planned, thus continue to place Thai Nguyen among the provinces and cities with the highest FDI attraction capital in Vietnam.

Dak Lak exports first macadamia lot to RoK

Nutri Soil JSC held a ceremony in Buon Ma Thuot city in Dak Lak province on January 3 to send the first container of macadamia to the Republic of Korea (RoK) in 2024, which is also the first batch of the product exported to the RoK from the Central Highlands via official channels.

The 10-tonne macadamia batch has gone through many examinations by authorised agencies, meeting all requirements, including in food safety. The importer is an enterprise in Jeollabuk province, which set up partnership with Dak Lak since 2017.

Addressing the ceremony, Deputy Director of the provincial Department of Industry and Trade Huynh Ngoc Duong said that the shipment via official channels to the RoK, the second market of Dak Lak macadamia after Japan, will open up opportunities for the product to enter other Asian countries as well as the world.

Dak Lak boasts favourable soil and climate conditions for macadamia farming, which were initially piloted in Phu Loc and Dlie Ya communes in Krong Nang district in 2003 with a total area of 4 hectares, and expanded to other localities in the province.

To date, Dak Lak has more than 4,500 hectares of macadamia with an output of more than 1,500 tonnes per year.

This year, the locality expects an export revenue of over 1.6 billion USD.

Over 255 tonnes of durian exported via Lao Cai border gates in first days of 2024

Over 255 tonnes of durian were exported to China via border gates in the northern province of Lao Cai in the first three days of 2024, earning nearly 1 million USD, according to Lao Cai Border Gate Customs Office.

Deputy head of the office Nguyen Thi Thanh Binh said that in the period, total trade turnover via Lao Cai’s border gates reached nearly 5.4 million USD, of which 2.8 million USD came from exports. 

Last year, the total value of imports and exports through border gates in the province reported a year-on-year rise of 39%.

The northern border province is striving for the total import-export revenue via its border gates of 4.5 billion USD in 2024, up 264.7% against that in 2023.

350 businesses to join Vietnam AutoExpo in Hanoi

As many as 350 local and foreign firms are expected to attend the 17th International Exhibition on Automobile, Transportation and Supporting Industry (Vietnam AutoExpo 2024) which is due to take place in Hanoi from June 13 to 16.      

On display across more than 500 pavilions will be automobiles, motorcycles, and specialised vehicles from leading global brands.

The annual event is expected to provide an ideal platform for both foreign and local businesses operating in manufacturing and assembling automobiles, motorbikes, and electric vehicles to share experience, introduce their cutting-edge products, and gain access to the world's most advanced achievements in the supporting industry.

It is therefore anticipated to help local firms enhance their capacity and expand international cooperation.

According to organisers, the four-day expo officially returns in Hanoi after a three year hiatus due to the COVID-19 pandemic and is expected to attract about 25,000 visitors.

Mekong province unveils major organic palmyra programme

An Giang Province plans to expand the area under organic palmyra palm trees and linkages between various stakeholders making products from their fruit for domestic and export sales.

The province has the largest number of palm trees in the Cửu Long (Mekong) Delta, predominantly in Tri Tôn District and Tịnh Biên Town, which have more than 35,000 of them.

The palm, which can live for up to 100 years, is utilised in its entirety: The flower nectar is employed in sugar production, while the fruits are consumed fresh or used in various food products. The leaves find purpose in thatching and crafting other items.

Thriving in dry areas in Tri Tôn and Tịnh Biên, this tree serves as a source of livelihood for many Khmer ethnic people.

Harvesting its fruits and flower nectar for sugar-making remains a traditional occupation, providing essential income for the locals.

Chau Don, located in Tri Tôn’s Châu Lăng Commune, owns 30 trees and usually harvesting flower nectar between the 11th and fifth lunar months. 

He manages to harvest approximately 50-80 liters of nectar daily, enough to make 15-20 kg of sugar.

Having grown up accompanying his father and others in nectar harvesting, he is used to climbing the trees.

He said this occupation supported his family's upbringing and continues to do so for his family, with he and his wife carrying on the tradition to support their two children.

Palmyra sugar, rich in vitamins and minerals, is highly sought after.

However, despite high demand, the traditional methods used by the Khmer mean quantity and quality fall short of market requirements.

To enhance quality and increase incomes for the Khmer, the province People’s Committee has approved a plan for until 2025 to zone areas for growing palmyra and produce organic products from it.

It aims to have 200 40-year-old palm trees in Tri Tôn and Tịnh Biên by 2025, with a focus on organic products.

The trees are known to produce more flower nectar as they age, with year-round fruit-bearing starting at 30-40 years.

The province's goal is to establish at least one certified production chain that links stakeholders producing and selling organic palmyra palm products by 2025.

It envisions profits from organic palm products being 1.5 – 2 times higher than from regular ones.

The province also aims for 80 percent of organic palmyra products having guaranteed company buyers by 2025 and 100 percent by 2030.

By 2030 Tri Tôn and Tịnh Biên are projected to have 500 trees for organic production, 200 trees in Tri Tôn and 300 in Tịnh Biên.

Nguyễn Thị Minh Thuý, deputy chairwoman of the province People’s Committee, emphasised that successful plan implementation involves providing knowledge about organic palmyra farming to households, co-operatives, co-operative groups, and production establishments.

The province would help them improve their farming techniques and make the transition to organic products, she promised.

It plans to pilot a model of producing organic palmyra products that involves collaboration with companies for guaranteed outlets, she said.

“The province will turn farming areas that intercrop palmyra with rice and other crops into organic farming areas.”

It aims to support the development of co-operatives and co-operative groups involved in organic palmyra growing and having linkages with companies. 

Assistance will be provided for producers to create brand names, promote sales and advertise their organic palm products.

To meet export market requirements, the province will identify markets for each type of product. 

Relevant departments and agencies are tasked with persuading companies to invest in producing organic palm products and collaborating with other stakeholders to sell them.

The Department of Agriculture and Rural Development and Tri Tôn and Tịnh Biên have been assigned to survey areas for establishing organic palm growing areas.

They will collaborate with production establishments for palm sugar production.

Soil and water will be tested in palm growing areas for organic certification, and the province aims to have 11 such areas by 2030.

The province has helped producers of palm products such as sugar and wine get recognition under the national "One Commune-One Product" programme.

Prosperity through orange and grapefruit cultivation on lychee land

The proactive application of science and technology into agricultural production, especially the promotion of organic farming, has proven successful for many farmers in Lục Ngạn District, Bắc Giang northern province. 

In the last months of the year, the harvest season begins for thousands of orange and green-skinned grapefruit trees in Nguyễn Văn Hữu's family orchard. 

During this time, Hữu's family is busy with traders coming to buy oranges and grapefruit, and visitors coming to take photos and enjoy the fruit at the garden.

Lục Ngạn District is known for its lychee trees, but Hữu has chosen a different direction in agricultural development. 

"Years ago, our family also cultivated lychee trees. However, after many years dedicated to lychee farming, I found that lychee trees had the disadvantage of a short harvesting period and price pressure from traders. Therefore, I was always trying to find an alternative," Hữu told Việt Nam News Agency. 

"After several trips to Bến Tre and Hòa Bình provinces to learn about citrus trees, I discovered that orange and grapefruit trees are very suitable for the hilly land in Lục Ngạn District."

In 2011, Hữu and his wife decided to purchase green-skinned grapefruit seedlings from Bến Tre Province for experimental cultivation. 

With proper care and suitable soil, the grapefruit trees grew well. 

He continued to expand the area, planting many different varieties of oranges and grapefruits.

As of now, his family's farm covers nearly 10 hectares, yielding an average annual harvest of 90 tonnes of green-skinned grapefruits and over 20 tonnes of oranges of all kinds. 

In 2022, his family's revenue from oranges and grapefruit was about VNĐ5.3 billion (US$217,900), with a profit of VNĐ3.5 billion. 

The revenue in 2023 is expected to reach nearly VNĐ7 billion, with a profit of around VNĐ4 billion.

Hữu has determined that if he wants to develop sustainably, he must adopt organic farming practices. Therefore, all 10 hectares of his family's oranges and grapefruits have been farmed organically since he decided to switch to growing citrus trees.

"To achieve high-quality fruits, my family has been practicing organic farming since the early years of establishing the farm. We use organic inputs such as buffalo manure, fermented fish and soybean solution to provide organic nutrients that help the plants grow strongly and safely.

"Additionally, we also employ biological measures to protect the plants, such as spreading lime and spraying lime solutions to prevent pests and diseases," said Hữu.

In recent years, Lục Ngạn District has been actively promoting the development of eco-tourism, rural tourism and orchard tourism.

Hữu's fruit farm has been selected by the district as an attractive tourist destination.

With the support of local authorities, in 2021, he established the Thanh Hải Agricultural and Commercial Production Cooperative. 

The cooperative consists of 10 members managing a total area of about 40 hectares growing oranges and grapefruits. 

To maximise their advantages, the members have collaborated to build tours, welcoming visitors to experience the lychee, orange and grapefruit seasons.

As for his family's farm, Hữu has also invested in building garden paths, fish ponds, accommodations, and flower gardens to serve tourism.

In July 2023, Hữu's family farm was officially recognised by the Department of Culture, Sports and Tourism of Bắc Giang Province as an ecological tourist destination. 

Each year, his fruit farm welcomes around 2,000 visitors. 

With the fruit cultivation model, his farm has provided jobs for 8-14 local workers who earn an average income of VNĐ6 million per person per month.

In 2023, Hữu was honoured by the Central Vietnam Farmers' Association as an outstanding Vietnamese farmer. 

MoIT promotes responsible business in e-commerce

To promote responsible business in e-commerce, the Ministry of Industry and Trade actively protects the rights and interests of consumers.

The move follows the increasing number of consumer complaints when purchasing goods on exchanges, e-commerce websites, and social networks.

The Ministry of Industry and Trade’s 2022 report showed that feedback and complaints in e-commerce ranked second out of 22 groups of goods and services classified by the Consulting Call Centre and Consumer Support System. Notably, the number of feedback and complaints in the e-commerce field in 2022 accounted for about 15 per cent of the total feedback and complaints.

Consumer complaints are mainly related to delayed delivery, delivery of incorrect quantity and quality; goods are damaged or broken due to storage and transportation; e-commerce platform does not support or is slow to refund cancelled orders; shops on the floor block communication and are not responsible for compensating orders for consumers.

Mr. Phan Thế Thắng, Consumer Protection Department, National Competition Commission (Ministry of Industry and Trade) said that along with development, the e-commerce environment has many potential problems and risks for consumers. Among them, the problem of counterfeit goods, goods of unknown origin and intellectual property violations is prominent.

Many groups and individuals took advantage of e-commerce to provide poor quality goods, counterfeit goods, goods with unknown origin, and goods not consistent with the images advertised on e-commerce, social networking platforms and electronic information sites. In addition, the situation of taking advantage of e-commerce, online platforms, and digital platforms, especially through social networks to defraud and appropriate assets of consumers is also a pressing issue in society and a "headache" for relevant regulatory agencies, according to Thắng.

A representative of the Department of E-Commerce and Digital Economy (Ministry of Industry and Trade) said that recently there has been a situation of fraudulent appropriation of assets through the form of recruiting sales collaborators and placing online orders on e-commerce platforms to receive commissions.

According to the Department of E-Commerce and Digital Economy, along with the inspection and examination activities, the Code of Responsible Business for Consumers in E-commerce issued by the National Competition Commission will help e-commerce platforms self-assess their compliance with e-commerce laws and protect consumer rights. From there, it will help improve the protection of consumer rights and promote sustainable and effective e-commerce business.

Furthermore, this will also help consumers evaluate and choose e-commerce platforms, websites or suppliers of goods and services more fully and feel secure when shopping. This contributes to building an online business cultural foundation, thereby bringing better value to the community and society.

Thắng said that protecting consumer rights in the online environment was becoming a hot issue for society in general and state management agencies, businesses and consumers in particular. Therefore, the National Competition Commission and relevant agencies will continue to review and propose improvements to relevant policies and regulations, following the requirements of integration and digital transformation.

At the same time, it is also necessary to develop and complete regulations guiding the implementation of the Law on Consumer Rights Protection, focusing on regulations on protecting consumer rights in the online environment. In addition, the MoIT will organise activities to improve knowledge and skills in consumption for consumers in e-commerce such as warning and guiding consumers to prevent and avoid fraud on e-commerce in cyberspace.

USD9.98 billion proposed for HCM City-Can Tho railway route

CT Group has recommended raising USD9.98 billion to implement the HCM City-Can Tho railway project through a public-private partnerships (PPP).

Under the group’s proposal sent to the government, the railway route would be 174 kilometres long and have 12 stations, running HCM City, Can Tho City and the provinces of Binh Duong, Long An, Tien Giang and Vinh Long. It will transport both passengers and goods.

Once approved, CT Group will co-operate with some Chinese partners to set up a joint venture to raise capital for the project. The project is expected to have a total investment of USD9.98 billion with 85 percent from the joint venture and the remainder from the state budget.

CT Group has suggested building urban areas along the route’s stations. The firm has pledged to complete the feasibility study in the first half of this year. Work on the project is expected to be finished before 2032.

Once put into operation, the route can serve 16.4 million passengers and 19.1 million tonnes of cargo annually by 2035. The figure would rise to 42 million and 81 million respectively by 2050.

The railway will start from An Binh Station in Binh Duong and end at Can Tho Station.

Foreign-invested firms contribute 73.1% of total export turnover
 
Foreign-invested enterprises (FIEs) contributed US$259.95 billion out of Vietnam’s total export turnover of US$355.5 billion last year, according to figures released by the Ministry of Industry and Trade.

The level of reliance on the FDI sector in terms of exports remains huge as the export revenue of FIEs including crude oil, still makes up about 73% of the country’s accumulative export turnover.

According to details given by the General Statistics Office (GSO), Vietnamese export earnings dropped by 4.4% to US$355.5 billion compared to the previous year.

Of the figure, the domestic economic sector grossed US$95.55 billion, a decline of 0.3% and accounting for 26.9% of total export turnover, while the foreign-invested sector, including crude oil, raked in US$259.95 billion in exports, a drop of 5.8% and accounting for 73.1%.

Last year saw a total of 35 items with export turnover exceeding US$1 billion, making up 93.6% of total export turnover.

Most notably, seven export commodities enjoyed export revenue reach over US$10 billion, thereby accounting for 66% of total export earnings.

In fact, the FDI sector has played a crucial role in Vietnamese economic growth, which is clearly demonstrated through its contribution to export revenue, job creation, and the formation of supply chains in key export industries, especially in the fields of electronics, machinery, garments and textiles, and footwear.

Furthermore, the country posted a trade surplus for several consecutive years thanks to the significant contribution made by the FDI sector.

2023 was the eighth consecutive year that Vietnam racked up a trade surplus, hitting a record high of US$28 billion with the FDI sector making up 99% in multiple fields.

In particular, FIEs account for 99.6% in phones, over 98% in computers, 93% in machinery, and more than 60% in garments-textiles. The country has been listed among the top 20 economies with the largest trade scale in the world, with a significant contribution from the FDI sector.

Huge FDI inflows into production activities have also given a fresh impetus for robust economic growth, a factor which has helped to advance the nation’s position on the global trade map.

Statistics indicate that the national economy's import-export scale exceeded US$730 billion by the end of 2022. However, due to the unfavourable impacts on the global economy coupled with weakened trade, import-export activities have failed to reach the US$700 billion mark, recording only US$683 billion.

Dearth of orders signifies shift in timber industry

The likelihood of a dearth of orders in the coming year in the timber industry is diminishing, according to industry insiders.

Vice president of the Handicraft and Wood Industry Association of Ho Chi Minh City (HAWA), Nguyen Chanh Phuong, told VIR that the timber market may gradually improve in the next 6-8 months.

Interest rates are falling, with the Fall 2023 Retail Report by Colliers from November revealed that almost half of retail chains in the US have intentions to expand within the next five years.

“This is the most evident signal that the string of order crises that has persisted since the second quarter of 2022, and resulted in the closure of numerous factories in Vietnam and the unemployment of thousands of workers, may be coming to an end,” Phuong said.

Although the order crisis moderated in the fourth quarter of 2023, the decline in demand continues to have significant repercussions, including a direct impact on the supply of wooden furniture originating from Vietnam.

According to Phuong, the output of timber furniture sold during the Christmas and New Year purchasing seasons of 2024 will increase by a mere 3-5 per cent, as opposed to the usual 15-20 per cent increase. Phuong is therefore concerned that the market will continue to be weak in the first and second quarters of this year.

Vietnam, the second-largest exporter of timber and wood products in Asia, failed to meet its export target of $17 billion for 2023, according to Do Xuan Lap, president of the Vietnam Timber and Forest Product Association.

“Wood and forest product exports are projected to have generated $13.5 billion in 2023, a 15.5 per cent decrease from 2022, as per the General Department of Vietnam Customs. This year could remain challenging since consumption remains minimal and there are additional rules from imported countries,” Lap said.

The Carbon Border Adjustment Mechanism went into effect in October 2023, and the EU Deforestation Regulation will do so at the end of 2024, which present challenges for companies engaged in exports. One such obstacle, Lap said, is the necessity for precise determination of the geographic coordinates of production plots.

“The number of government investigations into the application of trade remedies to the timber industry is increasing in the US, while labour and employment regulations are being enforced more strictly. Additionally, forest products exported from Vietnam to this market in Japan must be FSC-certified,” Lap said.

Although acquiring new orders and maintaining production speed remain critical objectives, he expressed a distinct viewpoint in contrast to his previous remarks.

“Demand and orders have decreased significantly due to the market and the pandemic. Consequently, many manufacturers have shifted their operations to exporting designs rather than processing based on available samples,” he added.

Lap asserted that a paradigm shift occurred in Vietnam’s timber processing sector when major manufacturers extended their reach into prospective export markets, including Saudi Arabia and Dubai, to supply interior products for newly developed real estate ventures.

The wood processing industry is presently concentrating on trade promotion initiatives, most notably the Hawa Expo 2024 in March, which will provide a platform to finalise orders for April through May.

Vietnam annually imports approximately 1.5–2 million cubic metres of round wood and sawn wood from tropical countries. The Department of Forestry under the Ministry of Agriculture and Rural Development estimates that this accounts for 30-40 per cent of the total imported wood materials in the industry.Vietnam’s government is making ongoing efforts to finalise the legal and regulatory structure necessary for the effective operation of its timber legality assurance system and the US 301 Agreement.

In accordance with VPA/FLEGT’s commitment to implement an organisation classification system, the Vietnamese government is contemplating amending and supplementing Circular No.21/2021/TT-BNNPTNT, which specifies the classification of wood processing and exporting enterprises, to broaden the scope and objects that are classified.

Hopes for advances in building materials

The building material sector suffered from a bleak 2023 with a dip in both production output and profits, and the situation is expected to drag on in 2024.

The Ministry of Construction last week released the 2023 production and business report, in which the building materials sector, particularly the cement industry, rendered a quite disappointed picture.

Cement production was estimated at 89.4 million tonnes, down 5.45 per cent on-year, and consumption fell to around 89 tonnes, down 6 per cent on-year.

Around 57 million tonnes were sold in the domestic market, showing a 10 per cent fall, while export of cement and clinker came to 32.6 million tonnes, slightly up by 2 per cent on-year. The export value, however, shed by more than 10 per cent to just $1.23 billion in 2023.

The domestic market has been the main consumer of the cement sector, each year snapping up 62-65 million tonnes of products over the past five years. This year, the figure sank below the 60 million-tonne benchmark.

Consumption of the cement sector had shed 15 million tonnes on-year in 2022 compared to 2021, making the 2023 picture even more critical.

The director of one cement business with a system of cement plants in the provinces of Ninh Binh, Ha Nam, and Nghe An revealed that the company’s business has been so bleak, they have had to halt several production lines to mitigate losses.

Meanwhile, state-owned Vietnam Cement Industry Corporation (Vicem), reported that by the end of the third quarter, many of its 10 member units have counted losses.

In the first nine months of this year, Vicem Ha Tien, the largest unit in the system, reported $222 million in the revenue, down more than 20 per cent on-year. Its profit contracted $1.5 million, whereas the company counted $8.5 million in the same period last year.

Amid slow consumption, Vicem Hoang Mai, another key member, had to halt its kiln operations for a month and reduce clinker production in Q3 to avoid rising inventory. In the first three quarters of 2023, the company incurred $1.09 million in losses.

Many cement plants have had to halted operation to downsize inventory in the past year. As of now, nearly 10 cement production lines reportedly sit idle across the country.

Meanwhile, the production output in 2023 for facing tiles and slabs was estimated at 386.5 million square metres, down 15 per cent on-year, and consumption fetched around 291.5 million sq.m, taking a 25 per cent dip on-year.

Similarly, ceramic plumbing fixture production output approximated 12.5 million items, down 25 per cent on-year, and consumption was around 11 million items. Construction glass output reached 211 million sq.m, slightly down by 2 per cent on-year, and consumption approximated 168 million sq.m.

The Ministry of Construction (MoC) assumes that the poor performance came in the context that many construction projects saw delays in implementation, and input cost saw a spike.

According to an MoC report, by the end of Q3 in 2023, supply of real estate items was stressed in all segments. The commercial housing segment saw the completion of 42 projects with almost 16,000 apartments, equal to nearly half compared to one year ago. Resort property and office-residential complexes saw the completion of 17 projects, equal to 57 per cent compared to a year ago.

Firms say that the way out for the building materials industry in 2024 is public investment disbursement acceleration as a driving force for economic growth, with many key transport infrastructure projects being implemented.

Vicem CEO Le Nam Khanh said, “As the cement industry is still in the stage of oversupply, and consumption in both domestic and export markets see no positive factors, 2024 is forecast to be another tough year for the cement industry. For the porcelain segment, due to huge production capacity and curtailed consumption since 2021, the segment runs at just 60 per cent of its designed capacity.”

Dinh Xuan Huy, chairman of the Vietnam Construction Ceramics Association, noted, “A frozen real estate market, firms lacking capital, lending rates fetching high, and high taxes compared to actual conditions have resulted in a stagnant building materials market. Unless these impediments are solved, a significant number of porcelain firms will go bust.”

In this context, eight business associations in the construction sector have been crying for help to the government.

In December, the MoC sought comments from the ministries of finance as well as industry and trade, along with the State Bank of Vietnam (SBV), about solutions to help firms in the building materials industry for submission to the government.

The MoC also asked the Ministry of Transport to command project developers to increase the use of reinforced viaducts at highway projects in the design stage, particularly in areas prone to floods and with weak soil, as well as those lacking materials for building roads, such as in the Mekong Delta region.

The MoC, the SBV, and localities shall continue expediting $5.06 billion of a preferential credit package for the development of social housing, workers’ residential blocks, and renovating old-style residential complexes.

The ministry also proposes reducing the clinker export tax rate to zero until the end of 2025; cutting lending rates by up to 2 per cent for businesses producing building materials in the same timeframe; and extending the deadline on charging no interest on overdue debts and restructured loans to reduce difficulties for businesses.

According to the MoC report, total production and business value of firms under its management reached an estimated $2.4 billion, equal to 85 per cent compared to one year ago, and 88 per cent of the full-year projection.

Singaporean and Taiwanese investors look to acquire stakes in two solar projects

Two companies from Singapore and Taiwan are looking to invest in two solar energy ventures in the central province of Quang Tri.

On January 3, Quang Tri Department of Planning and Investment said that it had sent a document to Quang Tri People's Committee seeking opinions on the potential capital contribution and share purchase.

Two foreign companies, namely Taiwan's Shinfox Energy Co., Ltd. and Singapore's Camellia Energy Pte., Ltd., have expressed their intention to contribute capital to two solar power projects in the locality.

Each company wants to invest VND122.5 billion ($5.2 million) in Gio Thanh Energy JSC, the investor in the Gio Thanh 1 Solar Power Plant, accounting for 35 per cent of the charter capital. This would mean that foreign companies would account for 70 per cent of Gio Thanh Energy's charter capital if the deal is approved.

Gio Thanh 1 Solar Power Plant is located in Gio Linh district. The project was completed in December 2020, covering an area of 65 hectares. With total capital of VND1.12 trillion ($47.3 million), the project has a capacity of 50MWp.

Six wind energy projects in Huong Hoa district have also sought approval to sell from 50 to 100 per cent ownership to foreign partners. Among them, Khe Sanh Wind Power JSC, the investor behind the Amaccao Quang Tri 1 Wind Farm project, proposed to transfer a 50 per cent stake.

The prospective parties include the Hong Kong-based CNNC Overseas International Investment Ltd. and Zhongyuan Foreign Engineering Co. Ltd., headquartered in Beijing.

Meanwhile, Sembcorp Solar Vietnam, under Sembcorp Group, is interested in purchasing stakes worth VND710 billion ($30 million) in Huong Phung Wind Power Co., the owner of the Huong Phung 2 and 3 plants, as well as taking over Gelex Quang Tri Energy Co., which owns the Gelex 1, 2, and 3 plants, for VND1.27 trillion ($53.6 million).

Work begins on VND5.2-trillion shopping mall in Halong

Work has started on a VND5,200-billion shopping mall in Halong City, Quang Ninh Province.

The Halong City Trade Center in Bai Chay Ward has more than 208,000 square meters of commercial space.

The 13-hectare facility is expected to be ready by the final quarter of 2025, and create employment for about 2,500 people.

The center can accommodate up to 10 million visitors and shoppers a year.

The investors of the project, Viet Phat Group and AEON Vietnam, intend to transform the mall into a one-stop destination for both locals and tourists, thereby boosting retail revenue and enhancing the overall tourist experience in the city.

Vietnam sustains recovery momentum, positioned for significant growth

Overcoming the fluctuations from the global economic landscape and internal constraints in 2023, Vietnam's economy continued its trajectory of recovery, with inflation kept under control and key balances safeguarded.

Positioned among the economies with the highest GDP growth rates in both the regional and global context, Vietnam's economic performance in 2023 has set a promising stage for further advancements.

In 2024, Vietnam cannot escape the impacts of global challenges and domestic constraints. However, the signs of economic recovery are becoming increasingly evident. The revival is being driven by various factors, including the global shift in supply chains and investment flows, the reopening of the Chinese market, significant growth in services and consumption, robust public investment, ample room for operating fiscal and monetary policies.

The National Assembly has aimed for a GDP growth rate between 6% and 6.5% this year, reflecting an optimistic assessment of the recovery prospects. 2024 is considered a breakthrough year in the 2021-2025 period, prompting the government, ministries, localities, and relevant agencies to exert maximum efforts toward the set target.

Numerous reputable international organisations have expressed high regard for Vietnam's achievements and prospects, predicting a rapid economic recovery in the time to come. Vietnam has consistently climbed the World Intellectual Property Organization (WIPO)’s global innovation ranking, rising from the 59th place in 2016 to 46th in 2023. Fitch Ratings, a renowned credit rating agency, meanwhile, upgraded Vietnam's long-term national credit rating to BB with a "stable" outlook.

According to the International Monetary Fund (IMF) forecast Vietnam's 2024 growth at approximately 5.8 percent, doubling the world average and being among the top 20 economies with the highest growth rates in the world.

Meanwhile, the Asian Development Bank forecasts a 6 percent GDP growth for Vietnam this year. The Southeast Asian economy is expected to remain resilient and recover swiftly in the near future, driven by strong domestic consumption and supported by moderate inflation, accelerated disbursement of public investment, and improvements in trade activities.

A more in-depth analysis of the economic growth drivers in 2024 by Deputy Minister of Planning and Investment Tran Quoc Phuong revealed that the overall economic growth at the end of 2023 was fundamentally positive. Despite not meeting lofty expectations, given the current international and regional context, such results provide a solid foundation for pursuing the goals and tasks set for the current year.

Furthermore, favourable opportunities for growth have been noticed for the country’s investment, exports, and consumption throughout 2024.

Greater efforts for economic growth in 2024

The investor community, businesses, and people enter 2024 with greater expectations about economic recovery promoting growth to help the national economy make a breakthrough in the time ahead.      

In line with this, 2024 represents the penultimate year of the five-year plan from 2021 to 2025. If the growth target of 6% to 6.5% is not met this year, then achieving the goal of the five-plan will become a unfeasible task.

The Vietnamese economy is progressing through its five-year plan for 2021 to 2025 and experienced 2023 with unprecedented difficulties such as the COVID-19 pandemic and global geopolitical instability with increasingly complex which led to unpredictable developments, thereby causing the global economy to stagger, resulting in the Vietnamese economy also being heavily affected.

Overcoming difficulties and challenges whilst standing firm in the face of "headwinds" has seen the national economy continue to achieve important and comprehensive results.

Vietnamese GDP growth in 2023 still reached 5.05%, making it among the top economies recording high growth rates in the world, whilst also boasting a stable macro-economy, controlled inflation lower than the set target, and guaranteed great balances.

Public, Government, and foreign debts, along with state budget overspending, were all kept in check, while budget revenues still exceed estimates.

Furthermore, 2023 also recorded great successes for the country on the diplomatic "front", when the nation continuously upgraded its relations with major powers such as the United States, Japan, and China, thereby raising its image, stature, prestige, and position to new heights.

As a result, the value of the Vietnamese national brand reached US$431 billion, moving a notch to rank 32nd out of 100 strong national brands globally. Most notably, international credit organizations, such as Moody's and Fitch Ratings have all highly appreciated the results and prospects of the national economy.

Recently in December, 2023, Fitch Ratings moved to upgrade the country’s credit rating from BB to BB+, with a "Stable" outlook.

Moreover, the nation has also become a bright spot of the global economy with a greater focus on international investment flows, especially in the fields of high technology, Industry 4.0 technology, semiconductor chips, AI, and hydrogen. Despite facing difficulties in global investment, the country still was able to attract more than US$36.6 billion in direct foreign investment (FDI) in 2023, as well as disbursing capital at a record high of US$23.18 billion.

All of these factors are creating momentum and confidence for the whole country to enter 2024 with great expectations intertwined with difficulties and challenges that are even greater than the opportunities and advantages.

To realize the goals of the coming, including GDP growth of 6% to 6.5%, there is no other way but to put effort into economic growth. The Government is also determined that the growth target will be the top priority this year, with a particular focus on promoting growth drivers; including exports, consumption; and especially investment such as public investment, private investment, and foreign investment.

This should be done alongside taking advantage of every opportunity to promote new growth drivers such as the digital economy, green economy, circular economy, and innovation.

It can be viewed as imperative to go ahead with innovation, reform, and economic restructuring, whilst allocating resources more reasonably and effectively. This is along with implementing resolutions on economic development by finalizing regional planning, sectoral planning, and provincial planning in order to create motivation for attracting investment for socio-economic development.

There is still a lot of work to be done with high hopes for a Vietnamese economy that will accelerate towards stronger development, thereby creating an important foundation for completing the five-year plan as an important contribution to meeting the nation's aspirations for prosperity in the time ahead.

Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes