Vietnamese economy shows swift recovery in post-typhoon period

The national economy has regained momentum and produced positive results, with bright sports being recorded in industrial production, export, and foreign direct investment (FDI) attraction during the nine-month span.

The country displayed macroeconomic stability; controlled inflation; and ensured major balances while overspending, public debt, Government debt, and foreign debt were within acceptable limits.

According to Nguyen Thi Huong, general director of the General Statistics Office (GSO), the economy grew by 7.4% on-year in Q3, exceeding the target set in the Government's Resolution No.1 (6.7%).

During the reviewed period, it soared by 6.82% compared to the same period from last year, with the agro-forestry-fisheries sector climbing by 3.2%, while industry and construction and service sectors marked respective increases of 8.19% and 6.95%.

As many as 17,700 new firms were registered in September, thereby bringing the total number of new businesses in the reviewed period up to 183,000, higher than the number of companies withdrawing from the market.

Survey conducted by the GSO indicated that 82.6% of manufacturing firms anticipate that conditions will improve or remain stable ahead in the fourth quarter, signaling strong business confidence in the economy's recovery.

Despite the damage caused by typhoon Yagi, international economic organizations still have confidence in the overall resilience of the Vietnamese economy.

“Vietnam’s economy showed robust recovery in the first half of 2024 and continues to maintain momentum despite global uncertainties,” said Shantanu Chakraborty, country director for Vietnam of the Asian Development Bank (ADB), elaborating that the recovery has been driven by improving industrial production and a strong rebound in trade.

In its latest report, the International Monetary Fund (IMF) decided to raise its forecast for Vietnamese economic growth in 2024 to 6.1%, higher than the "nearly 6%" projection made in June. The ADB projected a positive economic outlook for the country, forecasting its gross domestic product (GDP) growth at 6% in 2024 in its September Asian Development Outlook (ADO).

However, the economy still faces plenty of challenges, especially unpredictable fluctuations, while the momentum in the domestic market has not been effectively maintained.

The Ministry of Planning and Investment (MPI) pointed out that typhoon Yagi has severely affected agricultural production and tourism in the north, meaning that solutions need to be implemented in a timely manner to help enterprises quickly restore production and business activities to limit negative impacts on growth in the fourth quarter and early 2025.

he MPI projected a 7.6% to 8% economic expansion in Q4 following positive results in the previous quarter, thereby helping to achieve and exceed the full year target of 7% growth. The projection was made based on robust growth trends in various economic sectors, with agricultural production maintaining its growth trajectory, meeting demand of domestic consumption and export.

To reach the growth target in the fourth quarter, the Ministry said that resources must be prioritized to fine-tune policies and regulations, thereby helping to shape up a favourable environment as well as attract large-scale and high-tech investment projects, adding that it is a must to foster and renew traditional growth motives in investment, consumption, and export.

The MPI underlined the necessity to augment co-operation and hold economic dialogues with comprehensive strategic partners and strategic partners. The nation also needs to promote the working group mechanism that engages with enterprises and financiers to lure multinational corporations and strategic investors in the areas of chips, semiconductors, and AI.

Simultaneously, it can be viewed as essential to study rational and feasible policy packages to support firms and further propel new growth drivers forward, the Ministry added.