Work on the 156 Road in northern mountainous Lao Cai province. Under the context of the gloomy export climate, fiscal policy can help Vietnam reduce negative impacts due to slowing global demand. (Photo: VNA) Deputy Minister of Industry and Trade Do Thang Hai said the fall in globalimport demand for Vietnam’s strong goods would negatively impact the country'sexports this year.
According to Hai, the global economy continues to face several challenges,particularly in the world's biggest import markets, such as the US, the EU andJapan.
Besides, global inflation is high and inventories are large, which affectsconsumer demand for imported products, with the greatest impact onnon-essential items.
Reports from the General Statistics Office also showed Vietnam’s manufacturingand processing sector in the first month of 2023 was no longer the country’sexport growth driver, as the sector's export turnover grew the least comparedto agricultural, forestry, fisheries supplies, and mineral fuels groups. InJanuary 2023, the total export value of industrially processed products haddeclined by 22.7% compared to the same month last year, falling to an estimated21.52 billion USD.
Viet Capital Securities Joint Stock Company (VCSC) forecast Vietnam’s growth inexport and import turnover in 2023 to be downgraded from 7.5% and 8% to6% and 6.5%, respectively, due to weakening global demand.
Under the context of the gloomy export, VCSC’s experts believed the fiscalpolicy could help Vietnam reduce negative impacts due to slowing global demand.
Under a 2023 strategy report released recently, VCSC’s experts said thesupporting factors for Vietnam’s growth in 2023 included a large fiscal roomthat could help support the country’s growth through public investment.
Sharing the same view, experts of BIDV Securities Joint Stock Company (BSC)said the 792 trillion VND fiscal policy package, which was the highest level inthe country’s history, was one of the key drivers boosting the country’s GDPgrowth this year.
According to BSC, in the context of high interest rates and inflation in 2023,the difficult business environment of domestic enterprises will make thedisbursement of State budget investment capital one of the strong drivers topromote economic growth.
Recently, in the 2023 stock market prospect report, financial data providerFiinGroup also said public investment disbursement was one of the factors thatneeded to be monitored as that would help remove the ‘bottleneck’ ofcapital in the economy.
According to FiinGroup, the Government’s decision to allow the Ministry ofTransport to appoint construction contractors in 12 major expressway projectsshowed the Government's determination to accelerate the disbursement of publicinvestment capital, but it noted it was necessary to pay attention to theprogress of site clearance at the projects to be able to evaluate the actualdisbursement.
Prime Minister Pham Minh Chinh this month called for management to be enhanced tospeed up the progress of major projects, especially key traffic works.
“The disbursement of public investment must be accelerated from the beginningof the year,” the PM stressed, adding that the focus must be on the projectpreparation works and capital allocation.
Agencies and localities were also gearing up for the disbursement of publicinvestment. Hanoi and HCM City - the country's economic locomotives - recordedthe highest disbursement of public investment capital in January, with nearly 2.7trillion VND and more than 1.63 trillion VND, respectively, according tothe General Statistics Office.
Besides public investment, VCSC’s experts expected the recovery ofinternational visitors to Vietnam would also support the country’s growth thisyear.
According to the Vietnam National Administration of Tourism (VNAT),international visitors to Vietnam in January 2023 reached more than 871,000arrivals, an increase of 23.2% compared to December 2022 and 44.2 times higherthan last year. According to official statistics, tourism revenue in January2023 was estimated at 2.2 trillion VND, up 113.4% over the same period lastyear.
Travel experts around the world also forecast 2023 would see strong growth ininternational travel demand and Vietnam’s tourism would not be out of thistrend. Therefore, VNAT’s General Director Nguyen Trung Khanh believed 2023would have many breakthroughs in both the number of visitors and revenue,adding in 2023, VNAT and related agencies would actively conduct promotionalactivities throughout the year such as participating in international eventsand promoting national tourism on major media channels.
In addition, the reopening of the Chinese economy after a long periodof COVID-19 blockade orders would be a positive factor for Vietnam’sexports and tourism.
Besides, public investment and tourism, disbursement of foreign directinvestment (FDI) continue to increase and would also help the country’sgrowth in 2023.
VCSC expected disbursed FDI to remain stable and grow by 7-8% per year toreach about 24-26 billion USD in 2023 and 2024. Two supporting factors for thisforecast include feasible research activities for new projects after thedisruption caused by the COVID-19 pandemic and multinational companies diversifyingtheir investment activities out of China amid the ongoing trade tensionsbetween the US and China.
In addition, Vietnam has some basic advantages such as geographical location,competitive labour costs, and a wide range of free trade agreements./.
VNA
