(Illustrative photo: baochinhphu.vn)

2024 is an important year in the 5-year socio-economic development plan from 2021 to 2025. To achieve the set targets, besides boosting public investment, exports, and consumption, Vietnam will continue to implement policies and solutions to stimulate demand.

Exploiting advantages of the domestic market

Vietnam has a population of over 100 million people. Domestic trade and services account for a large proportion of GDP growth. The middle class is growing rapidly. Experts said these factors are opening up huge opportunities for Vietnamese and foreign investors.

To create growth momentum for the economy, the government will continue to promote trade and services toward domestic consumption and production, and help businesses recover. One of the solutions is to extend the corporate value-added tax reduction policy. Associate Professor

Dr. Dinh Trong Thinh, Senior Lecturer at the Academy of Finance, said tax reduction reduces the price of goods and services, stimulates consumption, and boosts production.

“Reducing VAT from 10% to 8% would decrease the price of goods between 1.5 and 1.7%. It would help businesses maintain production and business activities," said Mr. Thinh.

The government has directed banks to continue expanding consumer credit and develop policies to improve the competitiveness of businesses.

Vietnam has revised the legal framework to encourage green financing and technology, green production and investment, the circular economy, and low carbon emissions. Solutions to stimulate domestic consumption in 2024 are linked to green growth and carbon reduction. The Ministry of Planning and Investment is building a national set of scientific criteria for green classification, an important legal framework for green growth.

Determined to achieve this year’s targets

2024 is predicted to bring many difficulties and challenges, but unlocking new growth drivers is expected to create many new prospects. In 2023 Vietnam achieved a growth rate of 5.05%, making it one of the highest-growth countries regionally and globally and boosting the economy to 430 billion USD.

Although the global economy is forecast to see many difficulties and challenges, Vietnam's economy will have many advantages in 2024. These include reallocation of investments and a shift in the global supply chain following the pandemic, and Vietnam’s implementation of policies to improve its relations with major countries.

Dr. Tran Toan Thang, Head of the International Department of the Institute for Development Strategy, said: “The positive signals that we saw in 2023 are foreign direct investment with a big registration capital of 38 billion USD and a record disbursement of 23 billion USD. I think capital will be transformed into production capacity this year, to be one of the main drivers of Vietnam's economic growth.”

To renew traditional growth drivers, Vietnam has made flexible and sustainable changes in exports. Besides traditional markets, Vietnam is promoting exports to new niche markets and improving product quality to meet the strict requirements of foreign markets. 

Vu Ba Phu, Director of the Trade Promotion Department of the Ministry of Industry and Trade (photo: tapchicongthuong.vn)

Vu Ba Phu, Director of the Trade Promotion Department of the Ministry of Industry and Trade, said: “We need to fully tap the market's potential and pay special attention to neighboring markets where Vietnam has signed Free Trade Agreements with great incentives. New markets also have a lot of potential, such as the Middle East, Africa, and South America.”

Strong determination and effort at the beginning of the year are a favorable premise for Vietnam to achieve its set economic development targets.