The Vietnamese economy is expected to grow at 6 per cent in 2024 and 6.2 per cent in 2025 on fiscal policies and sizeable public investment, according to the Asia Development Outlook April released by the Asian Development Bank (ADB) yesterday.Despite lingering uncertainties in the external environment, the ADB maintained its earlier growth projection for Việt Nam, pointing out that a relatively broad-based restoration in export-led manufacturing and services, as well as stable performance of the agriculture sector are expected to support the recovery momentum.“Positive inflows of foreign direct investment (FDI) and remittances, a sustained trade surplus, recoveries in domestic consumption, and continued fiscal stimulus characterised by substantial public investment are seen as key to boosting growth in 2024,” the report wrote.Inflation will edge up at 4 per cent for 2024 and 2025 in tandem with the economic revival.“Việt Nam’s economy is expected to grow at a solid pace this year and the next, despite a challenging global environment,” said ADB Country Director for Việt Nam Shantanu Chakraborty.A sizeable amount of public investment, equivalent to US$27.3 billion, has been programmed for disbursement this year. Together with disbursements from 2023, this additional public investment would significantly stimulate growth.A gradual revival of export-led manufacturing would support FDI. Registered FDI increased by 13.4 per cent, and disbursed FDI went up 7.1 per cent in the first quarter of 2024 compared with the same period last year. Accelerated public investment and improved business conditions can spur private investment in 2024.According to the Ministry of Planning and Investment, an increase of 1 per cent in public investment disbursement corresponds to a 0.058 per cent increase in GDP growth. In addition, every one đồng of disbursed public investment capital stimulates 1.61 đồng of investment capital from the non-state sector.The report pointed out that one major obstacle to timely and quality project preparation is the complexity of regulations, particularly land use planning, land acquisition and site clearance. Soaring prices due to shortages of materials and inputs for production, driven by regulatory constraints, lead to higher costs, forcing contract renegotiations or the need for additional funding and approvals. (ICE HO CHI MINH CITY)

Fonte notizia: Vietnam News