Vietnam targets having hi-tech products make up 50% of 2024 exports: PM

Vietnam will strive to recover and boost processing, manufacturing and semiconductor industries towards having hi-tech products make up 50% of export turnover this year, Prime Minister Pham Minh Chinh has said.

Speaking at a Friday conference with local administrations to review last year’s performance and set tasks for 2024, he said Vietnam’s index of industrial production (IIP) should go up 7-8% this year.

The focus on hi-tech items is part of a broader plan to renovate the country’s growth model toward green and sustainable growth, aided by digitalization, circular economy and emerging industries, he said.

Vietnam’s manufacturing sector took a hard hit last year due to weak external demand. Its S&P Global Manufacturing Purchasing Managers' Index (PMI) ended 2023 in contraction mode, posting 48.9 in December. The index was below the neutral mark for almost the whole year. Meanwhile, the IIP inched up 1.5% year-on-year in 2023.

Electronics, computers and spare parts made up the largest export group last year, bringing in $57.34 billion, up 3.3% year-on-year. The runners-up, including phones and spare parts, machinery and equipment, garment and textiles and footwear, saw their exports go down year-on-year.

PM Chinh said that the government will continue to give priority to economic growth while keeping macro indicators stable. It will also aim to cut compliance costs and business conditions by at least 10%.

The implementation of critical transport works will be speeded up as will the execution of plans to submit the colossal North-South high-speed railway project to relevant authorities this year, he said.

The disbursement of public investment will be accelerated right at the start of this year, administrative reforms stepped up, traditional growth drivers boosted and new ones promoted, he added.

Fast growth economy

Delivering a report at the conference, Deputy Prime Minister Le Minh Khai said Vietnam’s growth of 5.05% in 2023 placed it among fast-growing economies regionally and globally. Inflation was kept at 3.25%, below the target of 4.5%, he noted.

Agriculture was the bright spot and remained a solid pillar of the whole economy, growing 3.83% in 2023, its fastest pace in the past 10 years.

State budget revenue beat the set target by 8.12% while the government granted tax, fee, and land rental breaks worth nearly VND194 trillion ($7.96 billion), he said.

The government has set aside VND560 trillion for salary reforms in the 2024-2026 period, he added.

Fitch Ratings upgraded Vietnam’s credit rating a notch to “BB+” with a “Stable” outlook. Vietnam was one of just two Asia-Pacific economies to get an upgrade.

Disbursement of public investment totaled VND676 trillion ($27.73 billion), the largest amount ever, meeting 95% of the annual target, higher than the 91.42% recorded in 2022.

Committed foreign direct investment (FDI) reached $36.6 billion, up 32.1% year-on-year despite a gloomy global context. FDI disbursement rose 3.5% to $23.2 billion, an all-time high.

The country welcomed 12.6 million foreign tourist arrivals last year, well above the eight million target.