Construction started on the Quang Tri airport project, which has an initial outlay of 5.8 trillion VND (227 million USD), in Gio Linh district on July 6 by the People’s Committee of the central province of Quang Tri and a joint venture between T&T Group and CIENCO 4.

Vice President Vo Thi Anh Xuan, Deputy Prime Minister Le Thanh Long and representatives from central and local agencies attended the groundbreaking ceremony.

The project, approved by the Prime Minister under the public-private partnership model, is located in the communes of Gio Quang, Gio Hai, and Gio Mai in Gio Linh district, covering an area of 265 ha.

The project is expected to be implemented in 50 years including 24 months for preparation and construction and 47 years and 2 months for operation and toll collection to recoup investment.

Upon completion, the airport will meet the standards of a Class 4C airport defined by the International Civil Aviation Organisation and a Level II military airport, capable of handling Code E aircraft and serving about 5 million passengers and 25,500 tonnes of cargo annually.

It will address the ever-growing demand for air travel, foster economic growth, and ensure high mobility for military operations and disaster relief efforts in the Central Region.

The construction of the airport is expected to be completed by July 2026.

Speaking at the ceremony, Deputy PM Le Thanh Long applauded the provincial People’s Committee, the Transport Ministry and relevant agencies for overcoming difficulties and creating favourable conditions for the airport project to be implemented.

He asked the province to support investors, construction and consultancy units during the project's implementation, especially ensuring the progress of site clearance and resettlement./.

Firms need to embrace transformation to sustain exports

With major import markets tending to impose more stringent requirements in terms of environmental and social responsibility, Vietnamese firms need to have strategies and plans to quickly switch to green manufacturing to sustain exports, heard a recent conference in Ho Chi Minh City.

Ho Thi Quyen, Deputy Director of the Investment and Trade Promotion Centre of HCM City (ITPC), told the conference titled “Current Foreign Trade Transactions: Changes in Business Strategies and Disputes Management” that Vietnam has integrated more deeply into with global markets, which creates new opportunities for enterprises to expand trade.

In the event, she said, trade has indeed grown sharply in recent years: imports and exports in the first half of 2024 were estimated at more than 190 billion USD after rising by 14.5% year-on-year, and there was a trade surplus of 11.6 billion USD.

But it has come with challenges and risks.

Chau Viet Bac, Deputy General Secretary of the Vietnam International Arbitration Centre (VIAC), said businesses, especially in foreign trade and logistics, are facing technical barriers related to the environment, green manufacturing and digital transformation since the world is paying attention to sustainable development.

Agile businesses could take advantage of the opportunities to thrive while those that adapt more slowly would face increasing challenges since markets are steadily making regulations more stringent, he said.

With sustainable development becoming an inevitable trend globally, Quyen highlighted the need for Vietnam to continue implementing mechanisms and policies for green transformation and development of a green and circular economy.

Speakers also referred to the legal risks businesses face in import and export activities.

Bac said disputes related to foreign trade and international purchase and sale of goods have always ranked first in the number of cases coming before the VIAC in recent years.

In many of them, Vietnamese enterprises were at a disadvantage because of mistakes right from the stage of negotiating to signing contracts, he said.

Contract management and risk management are extremely important in international trade, he said.

Bui Van Thanh, head of NewSun Law Firm, who has many years of experience in supporting domestic and foreign businesses with legal matters, said businesses need to clearly understand the nature and characteristics of foreign trade contracts and potential political and cultural risks.

They also need to verify the legal status, financial situation and compliance with local laws and regulations of the contracting parties, and the legal provisions of the host country to respond to risks, he said.

They need to be very careful about the terms and conditions in contracts.

Vu Quang Huy, general director of TEKCOM JSC, said exports of wooden products are looking up since demand recovered, but businesses are facing a challenge in meeting sustainability criteria set by markets such as the EU Deforestation Regulations, US’s trade defense measures against the wood industry, and net-zero emission goals.

They have also been scammed and routinely face risks related to payment, transportation, market fluctuations, regulatory changes, and others, he said.

He too spoke about the need for businesses to carefully evaluate partners, draft clear and detailed contracts, have safe payment methods and goods insurance, and monitor and update market information regularly.

Ton Nu Xuan Quyen, Chairwoman of BLUSAIGON JSC, said international trade is highly volatile, with a number of unpredictable factors stemming from geopolitical risks that push up costs.

Organised by ITPC and VIAC, the conference saw the participation of nearly 200 delegates from import-export companies and business associations in the city./.

Six-month growth higher than expected: official

The better-than-expected growth and a big trade surplus were among the results recorded during the first half of 2024, heard the Government’s regular press meeting held in Hanoi on July 6.

Minister - Chairman of the Government’s Office Tran Van Son, who is also Spokesman of the Government, said that generally speaking, the economy recovered to the pre-COVID-19 level during the first six months and continued the positive trend, with performance improving month over month and quarter over quarter.

Many important results were obtained, and most areas saw better performance than in the same period of 2023, he said, elaborating that the gross domestic product (GDP) strongly rebounded to grow 6.93% in the second quarter and 6.42% in H1, much higher than the 3.84% recorded during the same period last year and also better than the 5.5 -6% scenario set in the Government’s Resolution 01-CP.

The macro-economy has been kept stable, inflation under control, and major economic balances ensured. The six-month consumer price index (CPI) increased 4.08%, with the core inflation up 2.75%. Energy and food security has also been guaranteed.

Notably, exports continued soaring. Overseas shipments rose 14.5% while imports climbed 17% during H1, resulting in a trade surplus of 11.63 billion USD, helping ensure the balance of payments, Son noted.

The service and tourism sectors have also bounced back strongly. Total retail sales of goods and consumer service revenue increased 8.6%. Meanwhile, the number of international arrivals topped 8.8 million in six months, surging 58.4% year on year and 4.1% from the same period of 2019 before the pandemic broke out.

The official also underlined encouraging results in the financial and state budget situation, development investment, foreign direct investment (FDI) attraction, enterprise development, social security, per capita income, cultural and sports aspects, administrative reform, external affairs, and integration into the world.

However, Son added, officials also pointed out certain problems and challenges needing to be addressed such as the pressure on inflation, foreign exchange rates, and macro-economic stability, production and business hindrances in some areas, slow public investment disbursement, and the sluggish settlement of obstacles in the real estate market.

To achieve the growth target for H2 and create momentum for next year, the Government will continue to prioritise promoting growth in tandem with keeping macro-economic stability, controlling inflation, ensuring major balances of the economy, carrying out a reasonably expanded and focus-driven fiscal policy that is coordinated harmoniously with and facilitates the implementation of a proactive, flexible, timely, and efficient monetary policy.

Financial and budgetary discipline will also be tightened, the budget collection management enhanced, and state budget expenditure reduced, the Spokesman noted.

In addition, the Government will push forward with digital transformation; the exemption, reduction, and extension of the payment deadlines of taxes, fees, charges, and land use fees; along with obstacle removal to facilitate the real estate, corporate bond, and stock markets.

Electricity and petrol supply will be ensured for economic activities and consumption, Son went on, adding that key infrastructure projects will be accelerated while the traditional growth drivers (investment, export, consumption) renewed, and new growth drivers strongly promoted.

The Government is also set to step up institutional and legal perfection, administrative procedure reform, and national digital transformation, he told the press meeting./.

Enterprises urged to further engage in ESG criteria

Promoting green growth is an urgent trend, a driving force of economic growth and a crucial factor in enhancing national competitiveness admist international integration, said Deputy Minister of Planning and Investment Nguyen Thi Bich Ngoc.

She affirmed that major enterprises should integrate environment, society, and governance (ESG) criteria in their development process.

This is mandatory for businesses if they want to make strides.On the journey towards green growth, ESG criteria are the standard for measuring and evaluating an enterprise’s sustainable development. Many of Vietnam's major trade and investment partners have had strict requirements on this issue.

Meanwhile, ESG is drawing widespread attention thanks to the Government's efforts in promoting ESG-related practices and investors' increasing demand for sustainable investment.

Since 2022, 80% of companies surveyed has planned to implement ESG in next two to four years, contributing to disclosing ESG data and reports more common.The application of ESG criteria opens up opportunities for market expansion, and intensification of cooperation of businesses.

However, many firms find it difficult to achieve growth goals while still ensuring environmental protection, social responsibility and good governance because of increasing costs.Vietnamese enterprises are paying more attention to environmental issues but their understanding of environmental regulations is still modest.

A survey by the Vietnam Chamber of Commerce and Industry (VCCI) showed that only 31.8% of domestic private enterprises said they clearly understand environmental regulations while 68% said they have been negatively affected by climate change. Moreover, investment in ESG implementation is still inadequate.

Deputy Minister Ngoc said that the ministry has submitted the system of green economic sectors to the Government and developed a mechanism to support businesses with good ESG practices.Besides, the ministry is focusing on building a set of national green classification criteria which will be an important legal framework to implement green growth goals.

The criteria will be the basis for ministries, agencies and localities to select investment projects, and allocate domestic and international resources, particularly green credit sources./.

Bright prospects in Vietnam’s FDI attraction

There are factors that strongly drive the growth of Vietnam’s foreign direct investment (FDI) attraction in the second half of this year and there will be interesting surprises waiting ahead, said Chairman of the Vietnam's Association of Foreign Invested Enterprises (VAFIE) Prof. Dr. Nguyen Mai.

According to Mai, the economy grew nearly 7% in the second quarter, and also increased in the first half of 2024 against the same period last year. The growth is one of important factors that help Vietnam attract FDI.

In addition to political stability, Vietnam's FDI attraction policies have been getting good valuation from foreign investors, he said, adding that the strategy to attract FDI in key fields such as semiconductors and future technology is on the right track, he said.

Regarding the semiconductor industry, the US has pledged to support Vietnam in training 50,000 engineers and 500,000 workers from now to 2030. Big corporations such as VinGroup, FPT or Viettel are all actively engaging in the semiconductor industry.

These factors are providing strong support to Vietnam’s FDI attraction, and there will be surprises in the near future, Mai said.

Not only the US and the EU, investors from China and Hong Kong (China) are flocking to Vietnam to learn about investment opportunities in technology and renewable energy, he said.

With the recovery, Vietnam could attract 35-37 billion USD in newly registered and expanded FDI in 2024, Mai forecast.

With their advantages, some localities have been emerging in attracting FDI.At the World Economic Forum (WEF) meeting held in Dalian, China last month, representatives from the Foxconn Technology Group announced its new plant in Vietnam that has just been put into operation.

Foxconn has so far had factories in five provinces in Vietnam with a total investment of 4 billion USD, employing about 80,000 workers.

Notably, Foxconn said it has decided to pour nearly 400 million USD to build a factory specialising in producing electronic components, assembling and processing PCB circuit boards in Nam Son Industrial Park in northern Bac Ninh province.

Last month in northern Bac Giang province, Nokia announced cooperation with Foxconn to produce AirScale products, including the latest generation of massive MIMO AirScale radio devices serving 5G infrastructure.

A Nokia representative said the project will start in July, and products made at this factory will be used in both the domestic and international markets. Foxconn is Nokia's global manufacturing partner, and will expand its capacity to produce Nokia’s 5G products in Vietnam.

Whenever technology "eagles" like Foxconn and Goertek accelerate their expansion in a destination, it will create opportunities for the destination to attract other technology giants like Apple, Google or Huawei because Foxconn or Goertek are manufacturers that supply original equipment to major technology companies in the world.

Vietnam attracted nearly 15.2 billion USD in FDI in the first six months of this year, a year-on-year increase of 13.1%, according to the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment.

The foreign investors funneled their capital into 48 cities and provinces across the nation, with Bac Ninh leading in FDI attraction with nearly 2.6 billion USD. In the second and third places were Ba Ria – Vung Tau and Quang Ninh, with corresponding FDI of some 1.54 USD billion and 1.36 billion USD.

The FIA stated that investment capital mostly flows to localities with many advantages such as good infrastructure, stable human resources, improvements in administrative reforms and dynamic investment and trade promotion.

Particularly, the ten localities of Bac Ninh, Ba Ria-Vung Tau, Quang Ninh, Hanoi, Hai Phong, Ho Chi Minh City, Dong Nai, Bac Giang, Binh Duong, Hung Yen attracted 79.5% of new FDI projects and nearly 78% of the country's FDI capital in first five months of this year./.

US issues preliminary conclusions on anti-subsidy probe into Vietnamese plates

The US Department of Commerce (DOC) has issued its preliminary conclusions from the anti-subsidy investigation conducted into certain paper plates imported from Vietnam, according to the Trade Remedies Authority of Vietnam (TRAV).

These conclusions were made after the DOC initiated a countervailing duty probe into certain paper plates with the HS code 4823.69.0040 or 4823.61.004 at the request of businesses from the American Paper Plate Coalition on February 14.

According to the DOC’s preliminary conclusions, the temporary anti-subsidy duty rate stands at 5.48% for the only defendant company in the case.

With regard to non-responsive companies, the rate will be 237.65%, while the remaining firms will be applied a tax rate of 5.48%.

Based on the preliminary conclusions from the investigation, the US Customs and Border Protection Agency (CBP) has required a deposit for export shipments to the US in line with temporary anti-subsidy rates from July 1.

The DOC will conduct a verification report to clarify the information provided by Vietnamese enterprises before issuing its final conclusions and subsequently moving to impose official tax rates for Vietnamese businesses.

Case briefs or other written comments may be submitted to the Assistant Secretary for Enforcement and Compliance no later than seven days after the date on which the last verification report is issued in this investigation.

Rebuttal briefs, limited to issues raised in the case briefs, may be filed no later than five days after the date for filing case briefs.

The DOC is expected to hold a hearing if requested by the concerned parties and is likely to issue final conclusions on November 5.

The TRAV recommends that local businesses co-operate well with the DOC in the upcoming inspection, as well as submitting their written comments if necessary.

Da Nang seeks to boost collaboration with Japanese partners​

Japan Meeting” conference on prospects for cooperation after the two countries upgrade their relations to a Comprehensive Strategic Partnership for Peace and Prosperity in Asia and the World was held in the central city of Da Nang on July 5.

Addressing the event, Deputy Chairman of the municipal People’s Committee Tran Chi Cuong said Da Nang, one of the five centrally-run cities of Vietnam, is striving to become one of the major socio-economic centres of the country and Southeast Asia in term of start-ups, innovation, tourism, trade, finance, logistics, high-tech industries, information technology, supporting industries, and smart city, among others.

Towards that goal, the city considers integration and connectivity with the region and the world as one of the most effective ways to boost development, the official said, stressing that Da Nang has identified Japan as one of the potential markets that can provide the growth resources that Da Nang needs.

The city's leadership has always advocated and facilitated partnership across the fields with Japanese organisations, localities and businesses, he said.

Cuong highlighted that Da Nang has established official friendship and cooperation with four Japanese cities - Kawasaki, Sakai, Yokohama, Kisarazu - and cooperative relations with 20 other provinces and cities. Japan is the biggest investor in Da Nang in terms of registered investment capital, with more than US$1.14 billion in 261 projects.

Last year, Da Nang exported US$650 million worth of goods to Japan and imported US$50 million worth of products from the East Asian country.

The conference was held with the aim of boosting connectivity and attract investment in the fields of high-tech industry, digital technology, green technology, electronics, microchips and semiconductors, human resources, and more, he affirmed.

Japanese Ambassador to Vietnam Ito Naoki said that the relationship between the two countries was upgraded to a Comprehensive Strategic Partnership for Peace and Prosperity in Asia and the world in 2023, and it is important that the two countries concretise the partnership into extensive cooperation activities in many fields.

The ambassador stated that the Japanese government supports the "Japan-Vietnam Joint Initiative" programme, a cooperation framework between the two governments and businesses that was launched in March 2024 with focus on expanding investment in high-tech and information technology and human resources development.

Participants at the event introduced potential, strengths, investment climate and policies of the two sides in several areas.

Đà Nẵng city urges investment from Japan

The central city of Đà Nẵng has been calling potential investors for development of eight berths and series of infrastructure projects at the key Liên Chiểu Port by the end of 2024, expecting that Japanese businesses will seek investment opportunities in the port.

Director of Đà Nẵng City’s Investment Promotion Agency (IPA), Huỳnh Thị Liên Phương was pitching at the Đà Nẵng-Japan Meet, an event in the annual Việt Nam-Japan Cultural Exchange Festival, stating that Sumitomo Group from Japan has been trailing the Liên Chiểu Port Project.

She said the port, which is designed as a regional port and logistic centre in Asia, needs an initial investment in infrastructure and foundation facilities of an estimated US$2 billion and major investors will be announced later in 2024.

“The city will be building eight berths for docks of container ships, Liquefied Natural Gas vessels, integrated ships and the others. A wave breaker dyke system and a ring-road route connecting the port and key national highways and industrial parks have been developing since last year,” Phương said.

The beach city has drawn $4.3 billion investment from FDI projects, of which Japanese businesses constitute a 30 per cent share, to $1.14 billion, she added.

Chief Representative of the Japanese External Trade Organisation (JETRO), Takeo Nakajima, said Đà Nẵng has potential in information technology (IT) education and many universities have been given investment in human resources training to lure in the information industries.

Shiro Muto, chairman of the Japanese Chamber of Commerce and Industry in Việt Nam, said that Japanese investors keep an eye on developments in resorts, tourism, the automobile sector, semiconductor developents, chip design and automation.

He said the city should streamline procedures and train hi-quality manpower to meet the demands of Japanese investors.

Vice chairman of the city’s People’s Committee, Trần Chí Cường said that Đà Nẵng has been given a pilot plan on the development of a municipal government – the first of its kind in Việt Nam – to help speeding up the rapid and sustainable growth for the city and build it into a key driving economic power force for the country.

Cường said the Free Trade Zone project, which has recently been approved by the National Assembly, would create a huge and promising opportunity for all investors.

He emphasised that import-export turnover between Japan and the city reached $1 billion (Đà Nẵng’s export to Japan was $650 million) last year.

Cường said the city has called for further and deeper investment from Japan in a series of major trending industries including semi conductors, AI, IT and green growth technologies.

He said Đà Nẵng has been greenlit by the central government in offering the most favourable conditions and top priorities for investors.

Lâm Thị Thanh Phương, from the Ministry of Foreign Affairs, underlined that Đà Nẵng has been playing a key role in attracting investment from Japan in terms of infrastructure, human resources, its location and the long historical ties between Japan and Việt Nam.

She said Japan and Việt Nam shared a similar culture and history, deep and effective co-operation.

“Japan was a major Official Development Assistance (ODA) provider with a 30 per cent share in total ODA in Việt Nam. Japan also invested $76 billion in Việt Nam, while hosting 300,000 labourers from Việt Nam,” Phương said.

She said a report from JETRO showed that 64 per cent of Japanese investors plan to expand their current investment in Việt Nam, while 600,000 Vietnamese people are currently working and studying in Japan, making them the second biggest expat community in the country.

The number of Japanese nationals in Việt Nam has also increased by leaps and bounds to 22,000, making great contributions to the socio-economic development of Việt Nam.

Two Japanese investors -- Tokyo Keiki Precision Technology Inc and Niwa Foundry -- were the first ever investors into the Đà Nẵng Hi-tech Park from 2013, while Fujikin Incorporated from Japan later launched its $35-million Research, Development and Manufacture Centre there.

Mikazuki Hotel Group of Japan opened the $168.16 million Đà Nẵng Mikazuki Resort & Spa.

Yokohama and Sakai have supported Đà Nẵng in building a carbon neutral model at Đà Nẵng Port and industrial parks in ‘green’ industries transformation.

Strong economic performance in H1 calls for continued efforts toward year-end goals

If there are no major fluctuations, the General Statistics Office (GSO) predicts that Việt Nam is likely to reach its 2024 annual growth target, estimated between 6 and 6.5 per cent.

The strong growth experienced in the first half of the year provides a solid foundation for building momentum towards achieving the annual growth target. If there are no major fluctuations, the General Statistics Office (GSO) predicts that Việt Nam is likely to reach the 2024 annual growth target, estimated between 6 and 6.5 per cent.

According to the GSO, the country's GDP growth in the first six months of the year was 6.42 per cent year-on-year.

Nguyễn Thị Hương, GSO director general, said despite numerous challenges and uncertainties the global economy had improved as demand rebounded, while inflation was largely under control thanks to efforts to improve the economy's supply side.

Foreign investment disbursement in the first half of this year reached an estimated US$10.84 billion, surging 8.2 per cent year-on-year and marking a record high over the past five years. The foreign investment inflows into Việt Nam during the reviewed period also saw a positive increase of 13.1 per cent year-on-year, to nearly $15.19 billion.

Foreign investors registered nearly $9.54 billion in 1,538 new projects, up 47 per cent in capital and 19 per cent in project numbers, compared to the same time last year.

“Việt Nam's socio-economic situation in the second quarter achieved positive results amid global economic uncertainties. The Government’s management policies, led by the Prime Minister and various ministries and localities, have gradually proven effective, ensuring the smooth operation of supply chains and distribution of goods and services, reducing lending interest rates, stabilising the foreign exchange market, promoting public investment disbursement and implementing credit packages to support various sectors,” Hương said.

Also according to a series of reports from international organisations, Việt Nam's economy is experiencing a surge, fuelled by strong export and industrial production.

The International Monetary Fund (IMF) expressed optimism in its 2024 Article IV consultation with Việt Nam. Paulo Medas, head of the IMF team to Việt Nam, predicted a nearly 6 per cent growth for the Vietnamese economy in 2024, supported by robust external demand, stable FDI and recent policy adjustments. Inflation is expected to stay within the State Bank of Việt Nam (SBV)'s target range of 4-4.5 per cent this year.

The fund welcomed Việt Nam's efforts to streamline the real estate sector by amending the Land Law and other related regulations, he said, stressing the need for the country to continue restructuring struggling property developers and fostering a healthy corporate bond market.

Standard Chartered Bank released an update projecting Việt Nam's GDP growth at 5.3 per cent in the second quarter. Its experts forecast significant growth in retail sales (8.2 per cent year-on-year) and exports (14.2 per cent) for June. The electronics export sector is expected to maintain its upward trajectory throughout the year.

Import growth and industrial production were anticipated to reach 26 and 5.2 per cent, respectively, in June. Inflation might rise slightly to 4.5 from 4.4 per cent in May, marking the third consecutive month it stayed above 4 per cent. Rising costs in education, housing, health care and food were driving this inflation and the trend is likely to continue in the coming months.

A World Bank (WB) report dated June 19 indicated a 2.6 per cent month-on-month increase in Việt Nam's industrial production index (IIP) for May. This growth was primarily driven by the manufacturing and processing sectors, particularly machinery, equipment, computers and electronics. The report highlighted a notable rise in the import of intermediate goods, suggesting strong demand from trade partners and potentially even higher export levels in the near future.

Meanwhile, the Asian Development Bank (ADB) reported a 7.7 per cent growth in Việt Nam's local currency bond market in the second quarter compared to the previous one, which was attributed to increased government bond issuances and the SBV's resumption of issuing treasury bills in March. Treasury and other government bonds rose by 3.3 per cent in Q2 to support government funding needs. In contrast, corporate bonds fell by 0.9 per cent due to a large volume of maturing bonds and low issuance volume.

Việt Nam's sustainable bond market, comprised primarily of green bonds issued by individual enterprises, reached $800 million by the end of March, most on short maturities.

Despite the solid growth rate, Việt Nam's GDP in the first half of 2024 increased by 6.42 per cent, slightly lower than the 6.58 per cent rate recorded during the same period in 2022 within the 2020-24 timeframe.

In comparison to the two growth scenarios outlined in Resolution 01/NQ-CP, based on GDP growth results from the first quarter of 2024, second-quarter GDP growth surpassed expectations, reaching 5.85 per cent in the lower scenario and 6.32 per cent in the higher scenario. This positive outcome is a favourable position for Việt Nam to aim for the upper limit of the 2024 growth target of 6.5 per cent.

Despite this positive economic recovery, with second-quarter GDP growth estimated at 6.93 per cent and first-half growth at 6.42 per cent, surpassing forecasts, significant challenges lie ahead.

Several key macro-economic indicators show considerable pressures on the economy, notably inflation. The average Consumer Price Index (CPI) rose by 4.08 per cent compared to the same period last year, exceeding the lower end of the annual target range of 4-4.5 per cent. CPI is also showing a persistent upward trend on a monthly basis.

Economic experts caution that inflation may continue to rise due to supply fluctuations, global price volatility, increased demand during the peak summer season for electricity and services such as transportation and tourism, the wage increases which took effect from July 1 and anticipated adjustments in prices of State-controlled items such as electricity, medical services and education.

According to Nguyễn Thị Mai Hạnh, director of the GSO’s Department of National Accounts System, domestic consumption has shown signs of improvement but has not yet met expectations. Evidence of this can be seen in the fact that total retail sales of goods and revenue from consumer services (excluding price factors) increased by only 5.7 per cent over the past six months, significantly below anticipated levels.

According to Nguyễn Quốc Việt, PhD, deputy director of the Institute for Economic and Policy Research at the Hà Nội National University, businesses and individuals are still cautious in their spending and investment due to uncertain economic prospects. This cautious approach is reflected in the low credit growth index, despite an increase in deposits held by banks. Additionally, the rise of e-commerce and the availability of inexpensive goods from abroad are having a profound impact on domestic products.

In terms of industrial production, the added value of the entire industry in the first half of 2024 rose by 7.54 per cent compared to the same period last year. While the processing and manufacturing sector continued to drive overall economic growth, 56 localities saw an increase in the Industrial Production Index, although seven others experienced a decline.

Statistics indicate that certain service sectors, such as wholesale and retail, automobile and motorcycle repair, and finance and banking, all recorded lower growth rates than in the first half of 2023.

The disbursement of public investment funds has shown a tendency to stagnate, failing to exhibit strong growth even though total public investment resources this year are lower than last year. Notably, some ministries and departments have yet to disburse any funds, with allocated capital still sitting unused.

As the challenges and obstacles ahead are significant, Hạnh proposed industries and sectors should closely monitor production and business conditions to proactively address emerging risks. This includes focusing on policies to eliminate obstacles, freeing up resources for businesses and production establishments, particularly in processing, manufacturing and market services. Enhancing linkages between production and distribution and accelerating the efficient disbursement of public investment capital are also crucial to achieving targets and benefiting other economic sectors. Furthermore, efforts to stimulate domestic consumption and innovate trade promotion activities to capitalise on market recovery trends and export opportunities must continue.

Enterprises continue to grapple with numerous challenges, including persistent issues in the business environment, capital constraints and high input costs amid a challenging output market.

The country needs to 'renew' old growth drivers and effectively harness new ones, such as digital economic development, increased labour and total factor productivity and the advancement of the private sector. Enhancing and refining institutional quality is also pivotal.

To boost demand, the National Assembly has extended a 2 per cent reduction in VAT on certain goods and services until the end of the year. Some experts advocate for extending this policy until the end of 2025 and even propose deeper VAT cuts to encourage increased consumer spending.

A report from the Ministry of Planning and Investment underscores the necessity of implementing decisive measures to resolve production and business difficulties, unfreeze credit flows, expedite public investment disbursement, and drive economic growth. Additionally, maintaining focus on controlling inflation remains critical in the current economic climate.

Hạnh said that in the second half of the year, Việt Nam's economy must implement fiscal and monetary policies, as well as investment and consumption stimuli, with flexibility. This approach aims to ensure economic, political and social stability while balancing macroeconomic indicators and effectively controlling inflation. The country should also focus on revitalising growth drivers to foster breakthroughs in strategic infrastructure development.

"Adhering to the guiding principle of 'No retreat, Only action' we emphasise courage, proactiveness and unwavering determination. We are confident that with concerted efforts from the entire political system, ministries, agencies, local governments, organisations, businesses and citizens, the ambitious growth target of 6.5 per cent is achievable," she added. 

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