Vietnam PM demands pro-growth efforts over economic underperformance concerns

Prime Minister Pham Minh Chinh has ordered government agencies to deploy growth-bolstering measures to lift the underperforming local economy amid weaker external demand.

The PM made the request at a regular cabinet meeting in Hanoi on Wednesday after returning from a five-day trip to Turkey and the UAE where he represented Vietnam at COP28.

To stimulate economic growth, Chinh instructed the State Bank of Vietnam to continue exercising a proactive and flexible monetary policy, in coordination with a reasonable and focal accommodative fiscal policy.

He asked for acceleration of the three main growth drivers, namely investment (with a priority to speeding up public investment disbursement and attracting large-ticket and high-tech FDI projects); exports (with a focus on negotiations on FTAs with Brazil and Mercosur, and the Comprehensive Economic Partnership Agreement with the UAE); and consumption.

The PM also asked relevant authorities to seize opportunities provided by a shift in supply chains, trade and investment flows regionally and globally, and the development of industries such as semiconductors and electronics, and called for more green finance and credit to fund renewable and new energy development.

Agencies were asked to further streamline administrative procedures and business conditions, continue bettering the business climate, and facilitate credit access for businesses, especially small- and medium-sized firms.

Reports at the meeting indicated that Vietnam’s macroeconomic conditions have remained stable despite global headwinds, with inflation controlled at 3.22% in the January-November period. Interest rates have declined 2-3 percentage points from end-2022.

Foreign trade has shown signs of recovering, with exports in November rising 6.7% year-on-year and imports up 5.1%. In the 11-month period, exports were down 5.9% to $322.5 billion and imports decreased 10.7% to $296.67 billion, resulting in a trade surplus of $25.83 billion.

GDP expanded 4.24% year-on-year in the first three quarters this year, presaging failure to meet the full-year economic growth target of 6-6.5%.