Standard Chartered Bank expects Vietnam to have a robust GDP growth of 6.7% in 2024. (Photo: vneconomy) The forecast is highlighted in the bank’s recently publishedglobal research report on Vietnam titled “Vietnam – stronger but not easier”.
“Vietnam continues to offer a promising medium-term outlook. Tomaintain rapid growth and competitiveness, Vietnam needs to upgradeinfrastructure and prepare to lower carbon emissions,” said Tim Leelahaphan,Economist for Thailand and Vietnam, Standard Chartered.
According to Standard Chartered’s economist, retail sales andindustrial production have stayed robust despite the recent moderation. Exportsand imports are starting to recover, though electronics-related trade remainstentative. The FDI recovery remains lacklustre; a stronger recovery in FDI flowwould require faster GDP growth. Headwinds to global trade pose a key risk.
Given re-emerging inflation concerns, inflation is anticipated topick up to 5.5% in 2024 from 3.3% in 2023. Standard Chartered Bank forecastsmonetary loosening has likely ended, given Vietnam’s economic recovery startingto gain momentum. The bank expects rates to stay on hold despite a possibilityof another rate cut. Refinancing rate is expected to stay on hold at 4.5 %until end-Q3-2024, before a 50bps hike in Q4.
“We expect the central bank to strike a delicate policy balancebetween supporting the economy recovery and combating rising inflation andcurrency weakness. Inflation and a wide income-spending gap may result in asearch-for-yield behaviour and financial instability risks,” Tim said.
He believes the Vietnamese dong continues toface headwinds, with a mild VND appreciation, targeting 24,000 by end-2024.Forex reserves are forecasted to be rebuilt when US dollar strengthabates./.
VNA
