Low Q1 GDP growth affects annual 2023 target

Banana is a potential Vietnamese export

The General Statistics Office of Vietnam under the Ministry of Planning and Investment recently released a report on the socioeconomic situation of the first quarter of 2023. Accordingly, the agro-forestry-fishery sector grew 2.52 percent, contributing 8.85 percent to Vietnam’s GDP growth; the industry and construction sector declined 0.4 percent, resulting in a 4.76 percent GDP decrease; the service sector grew 6.79 percent, contributing 95.91 percent to GDP growth.

Nguyen Thi Huong, Director of the General Statistics Office of Vietnam, attributed the low GDP growth in the first quarter to the decline in export value of the processing and manufacturing sectors, such as electronics, textiles, garments, leather and footwear.

According to the growth scenario presented in Government Resolution 01/NQ-CP dated January 6, 2023, to achieve the 6.5 percent GDP growth target set for 2023, Vietnam should have achieved respective growth of 5.6 percent and 6.7 percent in the first and second quarters. Given its low growth in the first quarter, Vietnam’s GDP should grow 7.5 percent in the third and fourth quarters to realize the 6.5 percent annual target. “This is a challenge for Vietnam in the context of numerous difficulties still facing the global economy,” Huong said.

The Director of the General Statistics Office of Vietnam added that the Vietnamese economy usually grows slowly in the first quarter and faster in the second quarter and makes breakthroughs in the second half of a year. While this scenario is still possible, the economy continues facing numerous difficulties in the second quarter.

Auto manufacturing and assembly at a Ford Vietnam factory in Hai Duong Province

To promote economic growth in the second quarter of 2023 and the rest of the year, all sectors and fields of the economy should take synchronous measures to overcome difficulties. For their part, State management authorities should adopt flexible and suitable monetary policies, while at the same time facilitating business access to loans and helping them overcome difficulties in selling products. Priority should be given to business in sectors facing declined global demand, such as leather and footwear, textiles and garments, and wood processing. A flexible foreign exchange policy is also needed to create more favorable conditions for exports.

Localities should further accelerate the disbursement of public investment as well as economic recovery and development support packages, and create opportunities for the resumption of uncompleted projects. New projects will give a boost to the construction sector’s growth, helping improve the infrastructure and facilitate domestic production.

Localities and sectors should simplify administrative procedures related to investment and company establishment in order to create a transparent and fair business environment.