Participants at the annual "Vietnam Economic Pulse" forum, hosted by CIEM and UNDP in Hanoi, proposed a more selective and efficient approach to business regulations. By closely monitoring market trends and empowering market forces, the government can create a more conducive business environment.
Head Nguyen Huu Tho of the Department of Economic Analysis and Forecasting (CIEM) noted that Vietnam's economy has shown signs of recovery, regaining growth momentum akin to the pre-Covid-19 pandemic era, and currently boasts the highest growth rate within the ASEAN region.
Nevertheless, he emphasized that the domestic economic sector remains insufficiently robust to enhance its engagement with the international market. Key economic hubs, including Ho Chi Minh City, Hanoi, Binh Duong, Dong Nai, and Ba Ria-Vung Tau, continue to experience sluggish growth. For instance, Ho Chi Minh City's contribution to the national GDP in 2023 is 2.51 percent lower than it was in 2015. Similarly, Ba Ria-Vung Tau's contribution to the national GDP in 2023 is 2.21 percent lower than in 2015.
The stability of the business sector remains a concern.
The growth in the number of businesses has fallen short of expectations.
In the previous period, for every 100 businesses that entered the market, 50 exited, resulting in a net increase of only 50 businesses for the subsequent year. However, in 2024, the situation worsened, with 89 businesses leaving for every 100 that entered, leading to a mere 11 businesses remaining for the following year, as noted by Mr. Tho.
Looking ahead to 2025, the domestic market is anticipated to experience minimal changes in purchasing power, as the income levels of Vietnamese citizens have yet to see significant improvement. While the influx of international visitors to Vietnam is expected to rise robustly, this growth will not be uniform and may not correspond directly to GDP contributions.
In terms of the export market, 2025 is projected to maintain a positive growth trajectory similar to this year. However, any instability in global geopolitical conditions could have a substantial impact on both exports and imports, primarily due to rising maritime transport costs and trade protection measures. The expert highlighted that previously, there was one trade defense case for every US$2.5 billion whereas now it has shifted to one case for every US$1.5 billion.
To address the current challenges, the CIEM research team recommends issuing clear and concise legal guidance documents. Additionally, it is imperative to expedite the process of removing regulatory barriers introduced by recent legislation. By aligning regulations with market signals and empowering market forces, the government can create a more conducive business environment.
