The difficulties in the Vietnamese economy began to appear at the end of the fourth quarter of 2022. However, these difficulties were masked by the impressive growth record of the whole year and only became apparent when all the growth drivers became challenging, while the room for policy management seems to have reached its limit.
For the first time, business registration data shows that the total number of newly established enterprises and enterprises re-entering the market is much lower than the number of enterprises leaving the market.
Important sectors of the economy such as import and export activities, foreign investment attraction and disbursement, and industrial production index, all decreased over the same period in 2022.
The reason for the decline in trade activities is that the export market of Vietnamese goods faces many difficulties, due to unpredictable fluctuations in the world economic situation, high inflation in many countries and decreasing world consumer demand.
Notably, industrial production, especially the processing and manufacturing industry, has always been the main growth engine of the economy. When this region is in trouble, it will affect the GDP growth target for the whole of 2023.
Average inflation in the first two months of the year increased by 4.6% over the same period last year, a fairly high increase over the past five years, limiting room for policy management, to “watch out” for inflation.
Amid difficulties, the bright spot of the economy is the disbursement of public investment capital, which is very positively being improved. In addition, tourism has continued to recover, while total retail sales of consumer goods and services expanded at a double-digit rate.
With the drastic direction and strong solutions of the Government and Prime Minister, disbursement of public investment began to show positive changes right from the first days and first quarter of the year, creating a prime source of capital for the growth of total investment capital of the whole society. Therefore, public investment is expected to be the main driver of economic growth in 2023.
To keep the pace of growth in the context of intertwined opportunities and challenges, ministries, sectors and localities need to be consistent in performance, under the motto of solidarity, discipline, flexibility, innovation and effectiveness, as set out in the Government’s Resolution No.01/NQ-CP 2023. In particular, it is necessary to come up with proactive solutions to operate accurately, in accordance with the new situation, contributing to solving difficulties and challenges and taking advantage of every opportunity, to recover and promote the economy.
