Vietnam was well placed to seize growth opportunities and tap global trends, leading economists said at a forum on Tuesday, citing real estate market recovery as an indicator.
The real estate market is recovering and showing signs of bustle after a long period of hibernation, they noted.
Dr. Vo Tri Thanh, director of the Institute for Brand and Competitiveness Strategy, said: “The most difficult period of Vietnam's economy has passed and now is the time we need to seize opportunities to overcome challenges and go ahead".
He pointed out a series of "unprecedented" positive points including the recession risk of Vietnam's largest trade, finance and investment partners receding to a low level and falling inflation easing pressures on monetary policy.
In addition, the trend towards the digital and green economy alongside the application of advanced technologies is very strong. Meanwhile, Vietnam is the biggest beneficiary of shifts in the global supply chain.
Vietnam has been able to maintain stable policy interest rates; its financial and monetary conditions are improving, with exchange rates, despite fluctuations, still under control and the VND devaluation at a low level of only 3% or less.
In the first two months of the year, FDI disbursement grew nearly 10% year-on-year, an unprecedented figure, and the disbursement of public investment also saw positive signs, Thanh noted.
Dr. Can Van Luc, chief economist with BIDV bank and member of the National Financial and Monetary Policy Advisory Council, said Vietnam’s real estate market is enjoying several important supporting factors this year.
The world economy is recovering, inflation is falling rapidly and interest rates have begun reducing. Vietnam’s outlook for 2024-2025 is expected to improve with inflation within the target, slightly decreasing interest rates and stable exchange rates.
“The most difficult period for businesses to fulfil financial obligations has passed, while their capital access has been maintained," he said, adding that legal problems are gradually being resolved, mechanisms perfected and confidence recovering, albeit slowly.
"Capital mobilization has become easier and business-investment resources are more abundant thanks to lower lending interest rates and better market liquidity," he noted.
Traditional growth drivers are rebounding, Luc said. For example, the stock market has gained 13% from the beginning of 2024, with strong recovery seen in many industry groups that have experienced negative growth the previous year.
Luc also pointed out many signs indicating gradual recovery of the real estate market.
"Consumer, business and investment confidence is returning. The 2024 credit growth target of 14-15% looks feasible and the domestic corporate bond market is starting to recover."
However, Luc cautioned that the Vietnamese economy still face many challenges, including the external risks of slow world economy growth, which would lead to slow recovery of exports and investment.
"Moreover, private investment and consumption growth remains low," he said.
Domestically, public investment disbursement is yet to see a breakthrough. Businesses still face many difficulties relating to legal procedures and financial obligations, high input costs and slow recovery in orders.
The restructuring of listed businesses and credit institutions face many challenges and risks to the corporate bond and real estate markets still linger.
There are delays in building mechanisms for new fields like digital economy, green economy and circular economy.
A fear of mistakes still prevail among civil servants, hampering efficient discharge of their responsibilities.
The BIDV chief economist recommended that businesses restructure activities to control risks related to cash flow, interest rates, and exchange rates; proactively learn about and access fiscal, tax and fee support programs and packages; diversify capital sources, markets, partners and supply sources; promote digital transformation, green transition and energy transition; and take advantage of opportunities from the upgrading of Vietnam's relations with the U.S., Japan and Australia.
"Investors should diversify investment portfolios, limit herd behavior, accumulate knowledge and experience, and use professional services of financial intermediaries," he added.