Improve project quality to boost implementation speed, economic recovery, WB tells Vietnam

Improving project quality through better feasibility studies and reforming public investment procedures will help the Vietnamese government speed up their implementation and hasten economic recovery, a World Bank note says.

A monthly macro monitoring note released by the bank Wednesday makes the recommendation based on the assessment that implementation challenges continue to affect the disbursement of public investment despite a pickup this year.

The government has continued providing support to the economy with a 35% year-on-year increase in public investment during the first 10 months of this year, helping the government achieve 55% of the planned budget expenditure for the year, compared with 46.5% during the same period of 2022.

“This execution rate, however, is still low given that there are only two remaining months for disbursing the 2023 budget,” the WB note says.

A strategic and well-prepared investment pipeline with a focus on green, resilient and regional infrastructure will help bolster sustainable economic development, it suggests.

Domestic consumption remains subdued and slow credit growth continues to reflect weak private domestic investment and investor confidence even as exports show signs of recovery, it adds.

Monthly growth of retail sales remained flat (down 0.01% month-on-month, seasonally adjusted) in October, compared with a 0.55% increase in September.

Credit growth remained sluggish, registering a 0.1% month-on-month contraction and a 9.3% year-on-year expansion in October 2023, well below the pre-Covid period, reflecting persistently weak private investment.

At a National Assembly Q&A session earlier this month, legislators grilled Minister of Transport Nguyen Van Thang over the “unattractiveness and sluggishness” of public private partnerships (PPP) in transport projects.

Thang responded that among other causes, transports projects in Vietnam are not well prepared. He said the site clearance phase in other countries is executed separately at first, helping investors focus on actual project deployment.