The disbursement of public investment from the State budget changed significantly from the beginning of the second quarter of 2023, helping stimulate economic growth and development amid socio-economic difficulties in 2023.
Ministries, sectors and localities recorded high disbursement rates, including the State Bank of Vietnam, the Ministry of Transport, the Ministry of Defence, Quang Ngai Province, Long An Province, Dong Thap Province, and Ca Mau Province.
Doctor Nguyen Dinh Cung, former director of the Central Institute for Economic Research and Management (CIEM), said that public investment still played a leading role in boosting economic growth in 2023, while other traditional drivers such as exports and consumption are no longer growing as rapidly as it did right after the end of the COVID-19 pandemic.
“Public investment in the current period focuses on important infrastructure projects of the country. The National Assembly issued a specialised resolution, implementing highway construction projects from the northern mountainous region to Ca Mau Cape, creating conditions for all regions nationwide to have highways. That is a very positive difference and a highlight in the 2021-2025 term, as well as in 2023,” said Doctor Nguyen Dinh Cung.
The disbursement of public investment in 2023 was recognised through considerable contributions to building synchronous infrastructure and several important transport projects. The transportation sector completed and put into use 475 km of highways, raising the total length of highways, to 1,892 km. In addition, the construction was commenced on 12 North-South expressway projects, three East-West axial expressways, and two belt roads, among others.
In the aviation sector, passenger terminal T2 at Phu Bai Airport and Dien Bien Airport, were put into operation. In addition, the construction of Long Thanh International Airport and passenger terminal T3 at Tan Son Nhat International Airport are underway.
Main driving force for growth
The Government determined that public investment continues to be an important growth driver, contributing to fostering economic breakthroughs. Therefore, the Prime Minister issued Decision No. 1603/QD-TTg dated December 11, 2023, on allocating public investment capital in 2024.
Public investment capital will be prioritised to pay debts in the field of capital construction, arrange capital for the medium-term public investment plan in the 2021-2025 period, allocate capital for projects completed before 2024, and assign capital for projects to be completed in 2024.
The Prime Minister also requested ministries, sectors and localities to focus capital allocation on important projects, highway projects, and projects with huge impacts on society and economy.
In 2024, Vietnam strives to disburse at least 95% of the public investment capital.
According to Cao Thi Minh Nghia, Deputy Director of the National Economic Issues Department (Ministry of Planning and Investment), it is necessary to immediately adjust legal regulations related to public investment activities, the change of the use purpose of forest land and rice cultivation land, and the withdrawal of donor’s capital to further promote the disbursement of public investment and mobilise foreign currency for national development.
According to calculations, when the disbursement of public investment increases by 1%, GDP growth will rise by 0.058%. For every 1 unit of the public investment capital disbursed, there will be 1.61 units of non-state investment capital, contributing to stimulating the economy, generating jobs, and fostering socio-economic development. With a large amount of capital injected into the economy in 2023, public investment promoted its role as a driving force to raise GDP growth, contributing to economic recovery and development.
