Experts give recommendations to boost economic growth in new context
Experts gave recommendations to restore aggregate demand and promote growth in the new context at the mid-year macro-economic roundtable in Hanoi on July 11.
Speaking at the event, Assoc. Prof., Dr. Nguyen Thanh Hieu, Vice President of the National Economics University (NEU), noted that Vietnam reported a GDP growth rate of 3.72% in the first half of 2023 – a relatively low rate compared to the same period of the last 10 years (only higher than the 1.74% in the same period of 2020 - due to serious impact of the COVID-19 pandemic). Disbursement from the State budget was estimated at VND232.2 trillion (US$9.8 billion), equivalent to 33% of the yearly plan, while the capital disbursed from the non-state sector increased by 2% year-on-year, lower than the 9.5% rise in the same period of 2022. Registered FDI in Vietnam reached US$13.43 billion, down 4.3% year-on-year.
Hieu said that these figures demonstrate a sharp decline from the aggregate demand of the Vietnamese economy. The 6.5% growth target in 2023 may be hard to be reached in the context of unpredictable impacts from the world, and the domestic manufacturing sector yet to fully recover from the pandemic.
This requires the Government, ministries, sectors and agencies to take prompt and appropriate measures to restore the aggregate demand and develop the economy in the next context, he stressed.
UNDP Senior Economist Jonathan Pincus suggested building a counter-cyclical fiscal policy to stimulate demand amidst slowing global growth.
Specifically, it is necessary to reverse the decline in public investment, increase its efficiency, modernise the social welfare system suitable for a middle-income country, and make the country’s fiscal policy transparent, he added.
Assoc. Prof., Dr. Pham The Anh from the NEU stressed the necessity to encourage private investment through continuously cutting down lending interest rates and using short-term investment tax credit.
It is essential to control money supply growth around 10%, Anh said, stressing the importance of accelerating public investment, with focus on infrastructure projects, developing social housing, and building new public schools to meet social needs.
The State should have policies to stimulate consumption through social welfare subsidies for poor households and people who have lost their jobs; and increase taxable income and reduce value-added tax (VAT) for essential items, the expert said.