Laying the foundation for a breakthrough in 2025

The year 2024 ends with outstanding achievements in GDP growth and inflation control. All economic sectors play an important role, creating a solid foundation for rapid and sustainable development, ready for a breakthrough in 2025.

GDP scale close to 500 billion USD mark

At the press conference announcing socio-economic statistics for the fourth quarter and 2024, held on January 6, 2025, Ms. Nguyen Thi Huong, General Director of the General Statistics Office, said that GDP for the whole year of 2024 is estimated to reach 7.09%. Thus, 2024 will witness a strong recovery, and although 7.09% is not a breakthrough growth rate, it is a high and "very impressive" increase.

In fact, in most forecasts for the first half of 2024 by domestic and foreign experts and organizations, the growth rate is expected to be only around 6-6.5% (equivalent to the target assigned by the National Assembly ). Even after the positive shift with higher GDP growth in the second and third quarters, many updated forecasts, although adjusted upward, are still only around 6.5-6.7%.

Looking back at the entire period of 2011-2024, only 4/13 years recorded GDP growth of over 7% and the 7.09% increase last year was only lower than 2018, 2019 (years when the economy had very positive growth momentum at 7.47% and 7.36% before the Covid pandemic broke out) and 2022 (up 8.54%). In addition, the overall growth figure of 7.09% for the whole year of 2024 will be even more positive if placed in the context of the "improving" economic development through each quarter. Of which, GDP in the fourth quarter of 2024 increased by 7.55%, the highest increase of the year, surpassing the first quarter (5.98%), the second quarter (7.25%) and the third quarter (7.43%).

Notably, the GDP scale at current prices in 2024 is estimated at VND 11,511.9 trillion, equivalent to USD 476.3 billion (average central exchange rate VND/USD in 2024 is VND 24,170.59). GDP per capita in 2024 at current prices is estimated at VND 114 million/person, equivalent to USD 4,700, an increase of USD 377 compared to 2023. Along with that, the labor productivity of the entire economy in 2024 at current prices is estimated at VND 221.9 million/worker (equivalent to USD 9,182/worker, an increase of USD 726 compared to 2023). At comparable prices, labor productivity increased by 5.88% due to improved labor qualifications (the rate of trained workers with degrees and certificates in 2024 is estimated at 28.3%, 1.1% higher than in 2023).

The business investment environment continues to be strongly improved, supporting businesses and people in production and consumption.

Agriculture stable, industry and services grow impressively

Economic growth results in 2024 also reflect a trend of stability and strong recovery in the regions. In the agriculture, forestry and fishery sector, despite being affected by natural disasters, storms and floods, especially Typhoon Yagi, production activities still maintained a stable growth rate, reaching an increase of 3.27%, thereby contributing 5.37% to the total added value of the entire economy.

In the industrial and construction sector, the industry recovered positively and grew strongly compared to 2023. The added value of the industry in 2024 increased by 8.32% over the previous year (only lower than the 8.52% increase in 2022 in the 2019-2024 period). In particular, the processing and manufacturing industry alone increased by 9.83%. Along with that, the promotion of disbursement of public investment capital has promoted the production activities of enterprises and infrastructure construction contractors; at the same time, the decrease in lending interest rates has helped reduce input costs for enterprises... Thanks to that, the construction industry has had positive changes, with the added value for the whole year of 2024 reaching 7.87%.

Meanwhile, trade and tourism activities maintained high growth momentum, contributing positively to the growth of the service sector. The added value of the service sector in 2024 increased by 7.38%, higher than the growth rate of 6.91% in 2023. Some large-scale market service sectors, contributing significantly to the growth rate of total added value of the entire economy such as: Wholesale and retail; transportation, warehousing; accommodation and catering... all recorded positive growth.

According to Ms. Nguyen Thi Mai Hanh, Director of the Department of National Accounts System, General Statistics Office, stable domestic consumption will make an important contribution to growth in 2024. "Macro policies implemented since 2023 such as VAT reduction, salary reform, efforts to reduce prices of goods and services, etc. have contributed to increasing domestic purchasing power, which has declined since the COVID-19 pandemic," Ms. Hanh said. Data shows that total retail sales of goods and consumer services revenue in the fourth quarter of 2024 increased by 9.3% over the same period last year. In general, in 2024, total retail sales of goods and consumer services revenue at current prices is estimated at VND 6,391.0 trillion, up 9.0% over the previous year, if excluding the price factor, it increased by 5.9%.

Notably, commodity exports are an important highlight. In 2024, the total import and export turnover of goods reached 786.29 billion USD, up 15.4% over the previous year. Of which, imports increased by 16.7%; exports increased by 14.3%, thanks to great support from the recovery of consumption and shopping demand in major markets. The trade balance of goods had a surplus of 24.77 billion USD. In addition, foreign direct investment (FDI) continued to increase, a bright spot supporting production and export development, as well as contributing to economic growth in 2024. Foreign direct investment capital realized in Vietnam in 2024 is estimated at 25.35 billion USD, up 9.4% over the previous year, reaching the highest level ever.

Overcoming challenges to breakthrough in 2025

Ms. Nguyen Thi Mai Hanh said that the above results in 2024 were supported by a number of favorable factors. In particular, stabilizing the macro economy, flexibly and effectively applying fiscal and monetary policies have helped control inflation in a safe zone, and gradually decreasing operating interest rates are the basis for reducing lending interest rates to support production. Along with that, the investment and business environment continues to improve strongly, with many policies to support businesses and attract foreign investment; policies to stimulate consumption, reduce and extend taxes have supported businesses and people in production and consumption.

Transport and logistics infrastructure continues to make great strides, facilitating the movement of goods and connecting regions, helping to reduce transportation costs and increase the competitiveness of Vietnamese goods in the international market. These improvements not only support exports but also create favorable conditions for domestic and foreign investors, promoting regional economic development. Meanwhile, the signing and participation in free trade agreements (FTAs) in previous years are the premise and opportunity to help Vietnam's exports exceed the set target, affirming our country's position as an attractive destination for investment and production. Vietnam's export markets are increasingly diverse, not only focusing on a few large markets but also expanding to many emerging markets.

Meanwhile, the strong recovery of the tourism industry since the Covid-19 pandemic with a variety of eco-tourism and experiential tourism activities has attracted special attention from tourists. The good growth of tourism activities also has a spillover effect on other industries such as transportation, accommodation, food and beverage, etc.

However, the economy still faces difficulties. In particular, the world economic outlook continues to face instability and unpredictability, especially geopolitical tensions and conflicts that may continue to put pressure on fuel and basic raw material prices. Trade protectionism, trade competition, weak external demand, etc. are also factors that may affect Vietnam's market access and expansion. Moreover, on the basis of very high import-export growth in 2024, promoting to higher levels (such as maintaining double-digit export growth) is also a big challenge.

Although such risks may have an adverse impact on an open economy like Vietnam, according to Ms. Phi Thi Huong Nga - Director of the Department of Industry and Construction Statistics, General Statistics Office, with a stable macroeconomic foundation, increased FDI attraction, continued focus on public investment, etc., there will be a spillover effect and be favorable factors for the domestic economy as well as industrial production to continue to develop. In addition, the recent trend of shifting international supply chains has created great opportunities for Vietnam.

“If Vietnam takes advantage of this advantage and has a faster digital and green transformation to meet the shifting supply chain as well as ensure the increasingly stringent requirements of the international market, it can create a breakthrough in industrial growth in 2025 and the following years,” Ms. Nga commented.

Source: https://thoibaonganhang.vn/tao-nen-tang-cho-nam-2025-but-pha-159656.html