Vietnam’s GDP in the first quarter of 2024 was estimated to grow by 5.66 percent over the same period last year, higher than the GDP growth rate of the first quarters of 2020-2023.

The PMI (purchasing managers’ index) was over 50 in the last two consecutive months after staying below 50 in the last four months of 2023. The figures could be found in a survey by the General Statistics Office (GSO) about numbers of orders for export.

At leazst 19 percent of polled businesses said the orders they received in the first quarter of 2024 was higher than in the fourth quarter of 2023, while 47.3 percent of businesses said they have new stable orders and 33.6 percent have decreased orders.

In the first quarter of 2024, goods export turnover reached $93.06 billion, up 17 percent over the same period last year. 

Of this, export turnover of the domestic sector was $25.21 billion, up 26.2 percent, accounting for 27.1 percent of total export turnover. The foreign invested economic sector (including crude oil) exported $67.85 billion worth of products, up 13.9 percent, accounting for 72.9 percent. 

The service sector value increased by 6.12 percent, making up 52.23 percent of GDP. The total consumer goods and service retail turnover increased by 8.2 percent over the same period last year, while turnover from accommodation and eateries rose by 13.4 percent and turnover from tourism increased by 46.3 percent.

As many as 4.6 million foreign travelers came to Vietnam during the same time, up 72 percent over the same period last year and 3.2 percent over the same period of 2019, before the Covid-19 pandemic.

Total foreign investment capital in Vietnam, including newly registered capital, additional investment capital and capital contribution to Vietnamese enterprises, reached $6.17 billion, up 13.4 percent.

The implemented foreign direct investment (FDI) was $4.63 billion, up 7.1 percent. This is the highest implemented capital of the first quarter in the last five years.

However, experts pointed out that many problems still exist.

First, the credit growth rate is low. As of March 25, 2024, the total deposits at credit institutions had decreased by 0.76 percent compared with late 2023 (deposits increased by 1.17 percent the same period last year). The credit growth rate of the national economy was 0.26 percent (it was + 1.99 percent last year)

The low credit reflects the weak conditions of the economy’s health, especially the domestic sector. This also shows that banks’ bad debts are one of the concerning issues despite the National Assembly’s resolution on debt settlement.

In the first quarter of 2024, 73,900 businesses were reported leaving the market, an increase of 22.8 percent compared with the same period last year. 

The figure was abnormally high and was much higher than the 59,900 newly registered businesses and the businesses returning (+ 5.1 percent). 

As a result of the problem, the investment of the non-state sector grew by 4.2 percent only, a bit higher than the record low of 2.7 percent in 2023. 

Meanwhile, the real estate market has legal problems, which accounted for 70 percent of difficulties of real estate firms. The number of new projects in 2023 was just one-tenth of that of previous years. The real estate supply is in dribs and drabs, while demand for accommodation is still high in large cities.

This explains why the real estate market is frozen, but real estate prices are not decreasing, and the apartment market segment remains hot.

Analysts do not believe that interest rates will continue to decrease amid signs of inflation, the continued efforts to stabilize the dong/dollar exchange rate, and the continued high interest rates in the world. 

Tu Giang