Standard Chartered forecasts Vietnam’s 2024 GDP growth at 6.7% (Photo: VietnamPlus) Hanoi (VNA) – Experts of Standard Chartered Bank acknowledged that Vietnam’s economic prospect in the medium term remains promising and to maintain growth, the country needs to develop infrastructure and reduce carbon emissions.
In its recent report titled “Vietnam – Stronger but not easier”, the bank forecast the country will have a robust gross domestic product (GDP) growth of 6.7% in 2024 (6.2% and 6.9% in the first half and second half of the year respectively).
Tim Leelahaphan, Economist for Thailand and Vietnam, Standard Chartered said that Vietnam continues to offer a promising medium-term outlook. To maintain rapid growth and competitiveness, the country needs to upgrade infrastructure and prepare to lower carbon emissions.
According to Standard Chartered’s economist, retail sales and industrial production have stayed robust despite the recent moderation. Exports and imports are starting to recover, though electronics-related trade remains tentative. The FDI recovery remains lacklustre; a stronger recovery in FDI flow would require faster GDP growth. Headwinds to global trade pose a key risk.
Standard Chartered forecasts Vietnam’s inflation will pick up to 5.5% in 2024 from 3.3% in 2023. (Photo: VietnamPlus) Given re-emerging inflation concerns, inflation is anticipated to pick up to 5.5% in 2024 from 3.3% in 2023. The bank forecasts monetary loosening has likely ended, given Vietnam’s economic recovery starting to gain momentum. The bank expects rates to stay on hold despite a possibility of another rate cut. Refinancing rate is expected to stay on hold at 4.5% until end-Q3-2024, before a 50bps hike in Q4.
Tim Leelahaphan expected the central bank to strike a delicate policy balance between supporting the economy recovery and combating rising inflation and currency weakness. Inflation and a wide income-spending gap may result in a search-for-yield behaviour and financial instability risks.
According to Standard Chartered, the Vietnamese dong (VND) will continue to face headwinds, with a mild VND appreciation, targeting 24,000 VND by end-2024. Forex reserves are forecast to bounce back when the USD strength abates.
The USD/VND exchange rate is expected to reach 24,000 VND by the end of 2024. (Photo: VietnamPlus) Although there were still many difficulties, Vietnam's economy in 2023 achieved positive results, showing that the economy continues to have a new recovery trend, with growth in the next quarter higher than the previous one.
According to the General Department Statistics, growth results in the fourth quarter of 2023 of the construction industry reached 9.32%, highest compared to the previous three quarters and highest in the fourth quarter of all years in the period 2020-2023.
According to the General Statistics Office, Vietnam’s 2023 economic growth reached 5.05%, with 3.41% in the first quarter, 4.25% in the second quarter, 5.47% in the third quarter and 6.72% in the fourth quarter.
The industrial sector recovered positively in the last months of the year, resulting in a growth rate of 6.86% in the fourth quarter and 3.02% for the whole year 2023.
The construction industry showed a remarkable growth rate due to the promotion of public investment capital disbursement, the cooling prices of some construction materials, low interest rates and good foreign direct investment (FDI) attraction. Its growth rate reached 9.32% in Q4, the highest compared to the previous three quarters and also the highest Q4 figure in all years in 2020-2023.
Some market service industries in the fourth quarter of 2023 continued to maintain stable growth rates since the beginning of the year. For example, wholesale and retail; and repair of cars, motorbikes, motorbikes and other motor vehicles went up 9.88%; warehouse transportation 9.97%; accommodation and food services 8.85%.
