A factory in the Du Long Industrial Park in Thuan Bac district, Ninh Thuan province. - Illustrative image (Photo: VNA) Bloomberg’s latest survey shows that therefinancing interest rate, currently at 4.5%, is seen to stay on hold through 2025, inthe backdrop of a rebound in gross domestic product growth backed by strongexports. The rate was cutthrice between April and June last year to 4.5% from a peak of 6%.
In a previous survey, economists hadexpected a further 50 basis points of cuts during the current January-March period.
A view of HCM City from above - Illustrative image (Photo: VNA) Analystsalso raised their headline inflation forecasts for 2024, now expecting pricegains at 3.6% this quarter and at 4.05% in the next, up 0.7% and 0.75 % compared to the same periods last year,respectively.
They expect the annual inflation to average afaster 3.5% this year from 3% earlier, before easing to 3.2% in 2025. The 2024 levelis still below the government’s targeted range of 4%-4.5%.
According to Bloomberg, the SBV is likely to keep the policy interest rate unchanged in the coming time, and this means that the heavy lifting — of returning economic growth to above 6%by attracting investors and encouraging spending - will be left to thegovernment.
The Vietnamese economy is likely to grow 6.3% in the first quarter, and 6.5%in the April-June period. Vietnam’s GDP growth is forecast at 6% for this year, and 6.4% next year, said Bloomberg’s survey.
Han Teng Chua, an economist at DBS Bank Ltd, said Vietnam’seconomy is recovering, adding that foreign direct investment is likely to remain forthcoming,with Vietnam staying attractive over the coming years, as companies diversifyand derisk their supply chains by expanding into the Southeast Asian country.
Competitive wage costs, a wide network of trade agreements andsupportive business environment are key advantages for the Vietnamese economy, he stated./.
VNA
