Global headwinds hinder Vietnam hitting 2023 growth target

VIETNAM, facing continued global economic headwinds, will struggle to hit the year’s growth target of 6.5 per cent, National Assembly Chairman Vuong Dinh Hue told a Hanoi economic forum.

“It will be very hard for Vietnam to meet its (gross domestic product) growth target this year,” he said. The export-reliant country has been unable to gain economic momentum as global demand for products manufactured in Vietnam has waned and major markets such as China, the US, South Korea and Japan are enduring slowdowns, he added.

Vietnam’s exports dropped for a sixth straight month in August, the longest slump in 14 years. The country’s gross domestic product grew 3.72 per cent in the first half, the slowest pace of expansion over that time period in at least a decade, excluding the pandemic years of 2020 and 2021.

Vietnam’s slow rollout of government-funded infrastructure projects is contributing to the nation’s sluggish economy, Hue said. Just 42.4 per cent of planned public investment disbursements had been released between January and August, he added.

The parliament chairman also said that the slow disbursement of public funds is mostly due to regulatory issues tied to land clearance and compensation and resettlement of residents living at the project sites.

A slowdown in construction is also a drag on the economy, he said. 

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Vietnam’s exports fall further in August; growth outlook weak

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Vietnam has enjoyed a trade surplus only because its manufacturers are importing less material due to a lack of demand for production, he said, adding that domestic companies are having a tough time maintaining resilience in the face of plunging orders and limited capital.

Vietnamese manufacturers are also losing orders to competitors because they have not embraced green production methods, he said. In the apparel industry, for instance, Vietnam “may even lose out to Bangladesh, which is restructuring its textile industry to go green, and we haven’t been able to do so”. BLOOMBERG