Despite some positive indicators, the economy continues to grapple with difficulties.

According to the socio-economic report from the General Statistics Office, the gross domestic product (GDP) for the first nine months of 2023 increased by 4.24% compared to the same period last year. However, when considering the 2011-2023 period, the growth rate for the first nine months remains below the levels recorded in the same period in 2020 and 2021, which were 2.19% and 1.57%, respectively. These two years were notably affected by the Covid-19 pandemic. Positive indicators emerge On the supply side, when examining the increase in the gross value added (GVA) at basic prices in the economy, there were notable developments: the agriculture, forestry, and fisheries sector grew by 3.43%, contributing 9.16%; the industry and construction sector saw a slight uptick of 2.41%, contributing 22.27%; and the service sector recorded a robust rise of 6.32%, contributing 68.57%. As a result, the GVA of the economy for the first nine months of 2023 increased by 4.4%. Given that GDP equals GVA plus product tax less price subsidy, it is worth noting the influence of the tax factor on GDP. In principle, due to the growth in product tax during the first nine months of 2023, which amounted to 2.81%, GDP typically increases at a lower rate than GVA (4.24% versus 4.4%). Analyzing the sectoral composition within GDP, the added value increase in sector I (agriculture, forestry, and fisheries) contributed 11.51% to GDP, while sector II (industry and construction) contributed 37.16%, sector III (services) contributed 42.72%, and product tax less subsidy accounted for 8.61%. When compared to the same period last year, the added value contribution to GDP increased by 1.43% for sector III but decreased by 1.33% for sector II. The rise in added value contributions for sectors I and III, coupled with the marginal 0.14% decrease in the contribution of product tax, could be viewed as encouraging signs. An analysis of the input-output balance indicates that the final products of sectors I and III had a more significant ripple effect on the economy’s added value, whereas the final products of sector II had a limited impact on the domestic economy. This phenomenon can be attributed to sector II’s production, which largely involves sub-contracting and relies heavily on imports. Consequently, an increase in demand within this sector stimulates production and adds more value to other countries’ economies than to the domestic one. Differing GDP growth calculations based on end-consumption Examining the demand side of the equation, end-consumption exhibited a 3.03% increase, contributing a staggering 34.3% to the overall growth of the economy. Gross asset accumulation also rose by 3.22%, making a noteworthy contribution of 19.35%. On the other hand, exports of goods and services saw a decline of 5.79%, while imports of goods and services dropped by 8.19%. It is worth highlighting that in the first nine months of 2022, exports and imports of goods and services demonstrated impressive growth rates of 9.32% and 6.69%, respectively. However, there was an imbalance in exports and imports during this period, amounting to approximately VND115 trillion. Conversely, in the first nine months of 2023, although exports and imports of goods and services declined sharply, the imbalance between them narrowed significantly to only VND4.6 trillion. Consequently, the imbalance in exports, imports, and services contributed 46.35% to GDP growth. This outcome occurred despite the relatively modest increases of 3.03% in end-consumption and 3.22% in gross asset accumulation. A potential explanation for this phenomenon could be the price index of export goods and services, which increased by 2.07% during the first nine months of 2023, while the average price index of imports declined by 2.43%. When GDP is calculated based on end-consumption, the GDP growth rate for the first nine months is not 4.24%, but 5.94%. This discrepancy underscores that GDP growth, as currently calculated, might not hold substantial significance for the Vietnamese economy, despite adherence to the United Nations’ methodology. Economic challenges persist despite GDP growth The consumer price index (CPI) for the first nine months of 2023 edged up by 3.16% compared to the previous year, with core inflation growing at a rate of 4.49%. This inflationary trend may be attributed to price hikes in the circulation phase. The socio-economic report reveals that the final household CPI for the first nine months of 2023 increased by 2.97% compared to the same period last year, while the average CPI rose by 3.16% year-on-year. This variance is due to household end-consumption within the GDP calculation, which includes self-production, self-consumption in agriculture, forestry, and fisheries, as well as self-available, self-dwelled housing. Self-available, self-dwelled housing is recorded as both a contribution on the supply side (added value) and as an expenditure on the demand side (household end-consumption), thereby increasing the GDP’s overall size. Despite the recorded GDP growth, the economy continues to face significant challenges. According to the socio-economic report, in the first nine months of 2023, there were 116,300 new business establishments, a 3.1% year-on-year increase. However, 75,800 businesses suspended operations, reflecting a substantial increase of 21.6%, while 46,100 businesses ceased operations pending dissolution, with a surge of 26.9%. Additionally, 13,200 businesses completed dissolution procedures, resulting in a total of 121,900 businesses halting operations during this period.