Vietnam’s 2023 GDP is estimated to have reached 5.19%, with the potential to achieve a GDP growth rate of 6 – 6.5% in 2024 thanks to public investment, the recovery of exports and imports, and Foreign Direct Investment (FDI).
Overview of Vietnam’s GDP Growth 2023
With the speed of recovery and a strong upward trend in the last months of the year, the Central Institute for Economic Management (CIEM) predicts that Vietnam’s GDP in the fourth quarter of 2023 is estimated to reach 7.72% and the GDP of the whole year 2023 will reach 5.19%.
Agriculture has consistently been considered an important foundation, increasing by 2 – 3% across phases and contributing to Vietnam’s 2023 GDP growth at 11.51%. The industrial and construction sectors still account for the majority of the GDP structure at 37.16%. However, the industrial sector grew quite slowly at only 2.41% compared to the same period last year due to global demand contraction challenges. The service sector maintained its high growth momentum, making a positive contribution to the entire economic growth, accounting for 42.72% of the GDP structure. Product taxes, excluding subsidiaries, accounted for 8.61%of the GDP structure.
Vietnam GDP 2024 growth forecast
Forecasted to have the highest growth rate in Southeast Asia, Vietnam’s GDP in 2024 is forecast by world economic organizations such as the World Bank (WB) and the International Monetary Fund (IMF) to have a growth rate of 5.5 – 6%. The Central Institute for Economic Management (CIEM) has also proposed 3 growth scenarios for Vietnam’s GDP in 2024. These scenarios include a scenario where GDP could reach 6%, the highest scenario at 6.5% and the lowest scenario at 5.5%. These estimates align with the forecasts given by world economic organizations.
In addition, the average inflation rate as of November 2023 is 3.22%, and the Asian Development Bank (ADB) has forecasted a yearly rate of 3.8%, quite high compared to the previous year.
The inflation rate and GDP growth rate of Vietnam over the years
Vietnam’s GDP in 2024 is expected to increase due to loosening monetary policies such as the reduction in bank interest rates implemented since mid-2023, which will support growth momentum in 2024. Public investment disbursement is accelerated to stimulate private capital flows and foreign investments. Particularly, import and export activities show signs of recovery, typically exports to China in the first 11 months of 2023 have increased by 6%.
In addition, the promotion of the digital economy, circular economy, and green economy alongside the enhancement of strategic partnerships with the US and Japan, restructuring the economy, and refining institutions such as amending land and real estate business laws are also attractive factors enticing FDI investors and promoting strong economic growth.
Additionally, the inflation rate for 2024 is forecasted by ADB to remain at a level of 4% due to the persistence of high money supply and commodity prices. The Consumer Price Index (CPI) growth is at 3.16% and is forecasted to reach 4.5% by 2024, focusing mainly on the fields of housing and construction materials, education, goods and services with a robust increase of 7 – 8%.
The decrease in interest rates, stable fundamental exchange rates, and manageable risks of bad debt help to stimulate economic activities, promoting investment, supporting businesses in borrowing capital, and reducing cost burdens. In addition, the reduced interest rates also have a positive impact on the stock and real estate markets because investors may transfer part of their savings towards investing in these fields. This is also a positive signal that Vietnam’s economy in 2024 will be vibrant and promising.
TAccording to the General Statistics Office and the Central Institute for Economic Management (CIEM)
See more: Vietnam’s economic situation in 2023 and prospects for 2024
