Vietnam's Jan-Feb economic performance beat last year's period: Gov't

The Hanoi Times -- The economic and social situation in the first two months of the year has shown many positive results, performing better than the previous month and the same period in 2024.

Minister of Finance Nguyen Van Thang said this at the regular government meeting today [March 5], adding that citizens, businesses, domestic and foreign investors, as well as international rating agencies have increased their confidence in the economic outlook.

Macroeconomic stability was maintained and inflation was controlled, with the average consumer price index (CPI) for the two-month period rising by 3.72% year-on-year. The trade balance recorded a surplus of almost US$1.5 billion. Total registered FDI exceeded US$6.9 billion, up 35.5% over the same period, while the disbursed amount reached nearly US$3 billion.

The Industrial Production Index (IIP) rose 16.7% year-on-year in February.

The authorities continue to improve the institutional framework, enhance the investment and business environment, remove obstacles, and accelerate key infrastructure projects and new growth drivers. However, Thang acknowledged that growth drivers have not yet made a clear breakthrough. In addition, competitive pressures are intensifying in both export and domestic markets, while the economy's capacity to absorb capital remains weak.

Prime Minister Pham Minh Chinh said that the current workload is considerable while global developments remain rapid and complex. He highlighted the intensifying strategic competition among nations and policy adjustments in trade, especially with the looming tariff war, which is affecting global trade and supply-demand dynamics.

Chinh urged ministries, sectors, and localities to remain vigilant to external developments, especially in light of the weak global economic recovery.

Given that Vietnam is a developing country with a modest economic size, high openness, and limited resilience to external shocks, he stressed the need for caution.

The government is targeting GDP growth of at least 8% this year to pave the way for double-digit growth in the coming years.

Vietnam has identified three strategic breakthroughs: institutional reform, infrastructure development, and human resource development, Chinh said.

The government also aims to streamline administrative procedures, eliminate red tape, reduce processing time, and cut costs for citizens and businesses. The authorities plan to reduce business-related procedures and costs by 30%.

To achieve these goals, the Ministry of Finance (MoF) has proposed that ministries, sectors, and localities stabilize their organizational structures to ensure smooth operations. Agencies must address delays in issuing regulatory documents to improve the institutional framework and the investment environment.

Prime Minister Chinh stressed that monetary and fiscal policies must support economic growth of at least 8%. He instructed the State Bank of Vietnam to explore ways to lower policy interest rates through tools such as rediscount rates, refinancing rates, open market operations, overnight lending rates, central bank bills, and preferential lending to priority sectors.

The MoF has been tasked with accelerating public investment more decisively. The ministry will finalize a plan to issue government bonds and manage the government budget to increase revenues and optimize expenditures. These measures are aimed at securing financial resources for major infrastructure and key projects.

In this regard, Minister Thang said that a plan to issue government bonds will be submitted in January. Policies on tax exemptions, reductions, and deferrals, as well as land rent payments, will be forwarded to relevant authorities for approval before March 15.

The prime minister instructed the Ministry of Industry and Trade to develop a supply plan to prevent electricity shortages. The ministry has also been tasked with proactively implementing trade remedies and studying the "duty-free port" model to position Vietnam as a major logistics hub and increase the distribution of goods through digital platforms.

Relevant ministries and sectors have been instructed to prepare for a government meeting on global developments affecting Vietnam. The prime minister emphasized the need to resolve issues related to US business projects, balance trade relations between the two countries, and review tax policies.