Vietnam’s government is pushing for economic growth of about 6% this year, with Prime Minister Pham Minh Chinh urging more spending to spur domestic activity.
Gross domestic product growth of 6% was the “best case” scenario chosen by the cabinet, according to statements on the government’s website on Saturday, citing a meeting chaired by the premier. The worst-case scenario was for a 5% expansion, it said.
The government agreed to “prioritize growth, especially focusing on industrial development,” including manufacturing, according to one of the statements. Chinh ordered ministries to accelerate disbursement of public investment, in line with International Monetary Fund recommendations
The government’s latest projection comes a day after it reported that GDP growth in the first nine months of 2023 averaged only 4.2%, even after an acceleration in the third quarter. Vietnam’s official growth target is 6.5%.
The trade-reliant economy must grow by 10.6% in the fourth quarter to hit 6% for the full year, according to one of the statements. A 7% expansion next quarter will bring the average to 5% this year. Vietnam’s GDP grew about 8% in 2022.
Although the country’s exports returned to growth in September — halting a six-month slump — the nine-month average remained in negative territory.
The IMF’s executive board recently said the economy needs fiscal support to boost activity, given limited capacity for monetary policy to make a difference. Vietnam’s central bank has cut borrowing costs four times this year.
