Dr Can Van Luc’s Economic growth momentum will be more positive from the second quarter

DNHN - According to DrCan Van Luc, a member of the National Monetary Policy Advisory Council and several financial institutions, the Vietnamese economy still has growth potential, and the growth momentum will be more positive beginning in the second quarter

Mr Luc determined that, as a highly open economy, Vietnam cannot avoid negative external impacts when the global interest rate level decreases but remains elevated; international currency and financial market risks rise.

Domestically, neither the distribution of public investment capital nor the Economic Recovery and Public Investment Programme have been successful. The current situation of businesses is extremely precarious, as evidenced by the sudden increase in the number of businesses ceasing operations and declaring bankruptcy, which is nearly equal to the total number of newly established businesses and those reentering the market.

In terms of legal issues and access to capital, investment, production, and business activities corporations face numerous obstacles. Some essential industries, such as textiles, footwear, and wood processing, were required to reduce output and reduce labour.

But in terms of "threat" and "opportunity," we believe that Vietnam's economy has significant room for growth and recovery in the final months of the year. The reopening of China will have numerous positive effects on the Vietnamese economy in the areas of trade, investment, and tourism recovery.

Greater than 700 billion VND will be allocated for public investment in 2023, a 23% increase from 2022 and the highest level ever. If we achieve the government's goal of disbursing 95% of public investment, it will contribute approximately 2% to the annual growth rate.

In addition, the service and consumption sectors continue to exhibit a positive recovery trend and contribute significantly to economic expansion. Along with efforts to control domestic inflation, the gradual decline in global inflation also allows the economy to be less concerned about inflation, giving it more room to recover.

In addition, macroeconomic stability continues to be maintained as an essential foundation for Vietnam to have room for growth-supporting policies, particularly fiscal policy.

This year's monetary policy must be more multi-targeted because it must also stabilise the financial and monetary system in light of the global economic turmoil.

To support growth, the State Bank of Vietnam has changed its policy stance from tight and cautious to cautious easing. Continue lowering interest rates and expanding access to capital for businesses; continue implementing the policy of debt restructuring, bolster liquidity, and expedite the restructuring of credit institutions.

When public debt and government debt are quite distant from the permissible limit, fiscal policy should continue to be the most important policy for supporting economic growth. He confirmed.

Therefore, it is essential to implement an expansionary fiscal policy that is reasonable, targeted, flexible, and effective. The Government has issued Decree No. 12/2023/ND-CP on the extension of payment of VAT, corporate income tax, personal income tax, and land rent in 2023; request expedited VAT refund; direct the Ministry of Finance to urgently submit to the competent authorities a plan to reduce 2% VAT and additional support plans on tax exemption and reduction, fees, etc. to assist individuals and businesses.

Priority solutions also include accelerating the disbursement of public investment and the Socio-Economic Development Restoration Programme to reduce cash flow congestion, increase system liquidity, and free up all resources for development. perform.

Thanh Ha