Public investment to drive Vietnam’s 2023 economy: expert
Public investment is likely to become the major driving force behind Vietnam’s economy in 2023, said Dr. Vo Tri Thanh, director of the Institute for Brand and Competitiveness Strategy, at a conference on Tuesday.
Thanh clarified that public investment would see major developments this year thanks to authorities’ efforts to draft a comprehensive portfolio of investments. Another factor is that the National Assembly, the highest legislative body, has updated its investment mechanism, and officials in charge of public investment are now motivated to implement projects on time for fear of reprisals.
The disbursement target of 95% remains challenging, but Thanh said public investment will improve and help the country reach economic growth of the 6.5% goal set by the National Assembly.
The economist noted other supporting factors for Vietnam’s economy, particularly improved liquidity in the banking sector, which is indicated by lower interest rates and growing foreign currency reserves. Another factor is the State Bank of Vietnam is drafting changes to a circular on credit institutions buying and selling corporate bonds in order to facilitate the money flowing into the real estate sector.
Last month, Prime Minister Pham Minh Chinh required ministries, state agencies and localities to disburse at least VND675 trillion ($28.46 billion) in public investment, or 95% of the target, in 2023. The global situation continues to evolve in a very complicated, fast and unpredictable way, Chinh noted.
The government leader said that one of the solutions is to promote public investment, which is a driving force for development.
Economic challenges await
In his speech, Dr. Nguyen Anh Tuan, vice chairman of Vietnam's Association of Foreign Invested Enterprises (VAFIE), noted four economic challenges facing Vietnam this year, including the credit crunch, complicated legal procedures, shortage of export orders, and hurdles blocking foreign direct investment (FDI).
Tuan, also editor in chief of The Investor, said official reports show there are worrisome signs of FDI declines.
Disbursed FDI reached $22.39 billion in 2022, up 13,5% year-on-year, but newly-registered FDI was only $27.71 billion, down 11%.
In this year to March 20, disbursed FDI in Vietnam fell 2.2% year-on-year to $4.3 billion, while registered capital, which includes newly registered capital, additional capital, and capital contributions for stake acquisition, dropped 39% to $5.45 billion.
Furthermore, the global minimum tax (GMT) initiative is set to negate Vietnam’s current tax preferences for FDI businesses, posing challenges for the nation in retaining foreign investors. Meanwhile, Vietnam’s attractive sectors, such as renewable energy and infrastructure, are struggling with unclear planning and working mechanisms.
Tuan proposed ameliorating the legal framework to speed up administrative procedures, boosting the implementation of government resolutions to support corporate bonds and real estate, pushing the post-pandemic economic recovery program, and upgrading the business environment.
The VAFIE leader stated the GMT working group, led by the Ministry of Finance, has been slow in processing the GMT initiative. For the additional tax revenue gained from the GMT, Tuan proposed that authorities establish a fund to aid businesses in developing the workforce and infrastructure.
Dr. Bui Quang Tuan, head of the Vietnam Institute of Economics, said the world is facing three problems of "irregularity, instability, uncertainty." As Vietnam is an open economy, the volatility of the global economy will impact the country, he added.
Tuan elaborated the Russia-Ukraine conflict is unpredictable and escalating, which could quicken political fragmentation, further disrupt the supply chain, push back globalization, and worsen instability, leading to problems in energy, food, and financial security.
Another trend is the re-emergence of nationalism and the cold war, forcing international organizations to reevaluate their roles in the world, while the rise of new alliances such as the Russia-China partnership is turning the world into a multi-polar landscape.
The world is also under pressure from high inflation. The US Federal Reserve (Fed) has raised interest rates nine consecutive times to a new high, impacting exchange rates, trade, and investment in many nations. This financial instability has negatively impacted investor confidence, indicating the risk of financial crisis similar to 2008.
He also pointed out that green growth and digitalization have become the key trends of the post-Covid-19 recovery.
- Read More
Major Vietnamese developer Novaland appoints new CEO
Duong Van Bac, who joined Novaland as chief financial officer in August 2023, has been appointed general director, starting Friday.
Companies - Sat, November 2, 2024 | 10:24 am GMT+7
Vietnamese conglomerate Bamboo Capital posts 36-fold profit growth in Q3
Ho Chi Minh City-based Bamboo Capital Group recorded an after-tax profit of VND331.2 billion ($13.1 million) in the third quarter of 2024, an astounding 36-fold expansion year-on-year.
Bamboo Capital - Sat, November 2, 2024 | 9:41 am GMT+7
ThaiBev to bag $54 mln from Sabeco’s upcoming dividend payout
Vietnam Beverage, wholly owned by Thai Beverage (ThaiBev) will rake in VND1,374 billion ($54.26 million) worth of dividend from Ho Chi Minh City-based top brewer Sabeco.
Companies - Sat, November 2, 2024 | 9:13 am GMT+7
Steel heavyweight Hoa Phat pours over $2 bln into central Vietnam complex
Leading Vietnamese steelmaker Hoa Phat had invested more than VND52.5 trillion ($2.08 billion) in its Dung Quat Iron and Steel Integrated Complex (Dung Quat 2) in the central province of Quang Ngai as of Q3/2024.
Industries - Sat, November 2, 2024 | 8:00 am GMT+7
Vietnam becomes Australia’s fastest-growing inbound market
The number of Vietnamese tourists to Australia has grown significantly after the Covid-19 pandemic, with nearly 178,000 reported in the 12 months to August 2024, according to a Friday press release by the Australian Minister for Trade and Tourism’s Office.
Southeast Asia - Fri, November 1, 2024 | 10:02 pm GMT+7
Study finds shift in Thai consumers’ spending patterns
Consumers in Thailand are shifting their spending focus to experiences and investments, according to the latest ASEAN Consumer Sentiment Study (ACSS) by United Overseas Bank (UOB).
Southeast Asia - Fri, November 1, 2024 | 10:00 pm GMT+7
Energy security, digitalization key to Indonesia's economic growth
The Indonesian government is prioritizing long-term economic growth through energy security, digitalization, and natural resource industrialization, according to Deputy Minister of Finance Thomas Djiwandono.
Southeast Asia - Fri, November 1, 2024 | 9:58 pm GMT+7
Vietnam PM's Middle East tour creates breakthroughs in economic, trade, investment cooperation: FM
Prime Minister Pham Minh Chinh’s freshly ended six-day trip to the UAE, Saudi Arabia and Qatar has produced important outcomes, demonstrating the growing relations between Vietnam and the three Middle-East countries, Deputy Prime Minister and Foreign Minister Bui Thanh Son told the Vietnam News Agency.
Politics - Fri, November 1, 2024 | 9:25 pm GMT+7
Vietnam, Qatar look to tap potential for energy, oil & gas collaboration
Vietnam and Qatar have recognized the significant potential for further collaboration in multiple sectors such as energy, oil and gas, especially LNG, agriculture, Halal industry, and banking.
Politics - Fri, November 1, 2024 | 9:02 pm GMT+7
Thailand bans export of raw palm oil until December
Thailand's Department of Internal Trade has temporarily banned the export of raw palm oil due to reduced production caused by drought and plant diseases.
Southeast Asia - Fri, November 1, 2024 | 8:31 pm GMT+7
Envision Energy to build $420 mln wind power plant in Vietnam from June 2025
Envision Energy Singapore Pte Ltd, under China-based Envision Energy, aims to kick off construction of the 300-MW Envision Nam Po wind power plant in Vietnam’s northern mountainous province of Dien Bien in June 2025.
Energy - Fri, November 1, 2024 | 8:30 pm GMT+7
Indonesia to ban plastic waste imports from 2025
The Indonesian government will start imposing a ban on the import of plastic waste from the beginning of next year, according to Minister of Environment Hanif Faisol Nurrofiq.
Southeast Asia - Fri, November 1, 2024 | 8:29 pm GMT+7
Islamic economy makes up 48% of Indonesia’s GDP
The contribution of Islamic business activities to Indonesia’s GDP has been estimated at 48%, local authorities reported at the 11th Indonesia Sharia Economic Festival (ISEF).
Southeast Asia - Fri, November 1, 2024 | 8:28 pm GMT+7
Restructured construction giant Tracodi gets set to execute ambitious plans
After changing its name and restructuring as a group, Tracodi Construction Holdings JSC (HoSE: TCD), a member of Bamboo Capital Group (HoSE: BCG), has completed a leadership shake-up and is poised to achieve rapid growth.
Bamboo Capital - Fri, November 1, 2024 | 4:43 pm GMT+7
Philippines requests companies to pay for plastic waste treatment
The Philippines expects its "Extended Producer Responsibility" (EPR) that came into force last year will help it curb plastic waste
Southeast Asia - Fri, November 1, 2024 | 4:30 pm GMT+7
Indonesia warns of rising online terrorism
Indonesia's National Counter-Terrorism Agency (BNPT) has warned of a shift in terrorism tactics, moving from public attacks to online platforms that target vulnerable groups, particularly women and children.
Southeast Asia - Fri, November 1, 2024 | 4:29 pm GMT+7