ADB maintains 6% growth forecast for Vietnam's economy (Photo: VNA) Hanoi (VNA) – The Asian Development Bank (ADB) has maintained its earlier growthprojection for Vietnam this year despite lingering uncertainties in theexternal environment. Vietnam’s economy is expectedto grow at 6.0% and 6.2% in 2024 and 2025, respectively, heard a conferenceheld in Hanoi on April 11.
At the event,Nguyen Ba Hung, ADB Chief Economist in Vietnam, said slowing global demand andhigh international interest rates have impacted Vietnam's growth in 2023.However, the rapid shift to pro-growth monetary policy and large-scale publicinvestment is one of the key measures taken to sustain growth recovery.
A relatively broad-based restoration inexport-led manufacturing and services and the stable performance of theagriculture sector are expected to support Vietnam’s recovery momentum.Positive inflows of foreign direct investment (FDI) and remittances, asustained trade surplus, recoveries in domestic consumption, and continuedfiscal stimulus characterised by a substantial public investment programme areseen as key to boosting growth in 2024.
ADB Country Director for Viet Nam ShantanuChakraborty said that Vietnam’s economy is expected to grow at a solidpace this year and the next, despite a challenging global environment. However, global geopolitical uncertainties and domestic structuralfragilities could impact the outlook. Therefore, policy measures in 2024 willneed to combine short-term growth support measures to strengthen domesticdemand with long-term structural remedies to promote sustainable growth.
Softened global demand caused by a sloweconomic recovery and delayed normalisation of interest rates in the US and other advanced economies, coupled with continued geopoliticaltensions, are likely to hamper a full recovery of Vietnam’s export-led growthin 2024.
To accelerategrowth, stronger measures are required to address domestic structuralfragilities, such as heavy reliance on FDI-led manufacturing exports, weaklinkages between manufacturing export industries and the rest of the economy,incipient capital markets, an overreliance on bank credit, and complexregulatory barriers to business.
Public investment remains a catalyst for Vietnam’s economic growth,so its effective implementation is crucial. Although the Government has appliedvarious measures to expedite public investment and enhance effective execution,more systematic measures are required to improve legal and regulatory processesand reduce constraints on efficient delivery./.
