Vietnam’s GDP to grow 6.7%: Standard Charter

Hanoi (VNA) – Leading officials of the Standard Chartered said the recovery of Vietnam’s economy will proceed strongly in the second half of this year, especially now that tourism has been reopened following two years of closure.

Garment production. (Photo:VietnamPlus)
The Standard Chartered on July 27 predicted that Vietnam’s GDP will grow by 10.8% in the third quarter and 3.9% in the last, bringing the yearly GDP growth up by 6.7%.

Experts of the bank also said that the high world petrol prices will cause adverse impacts on the economy.

Economist Tim Leelahaphan in charge of Thailand and Vietnam of the Standard Chartered said the economic recovery has shown spill-out signs, macro-economic indicators are forecast to continue improving in July. The recovery of the economy will proceed strongly in the second half of this year, especially now that tourism has been reopened following two years of closure.

Economists at Standard Chartered also held that the State Bank of Vietnam will keep the policy interest rate at 4% in 2022 to support firms as well as the growth of the economy, despite the increasing inflation. Retail sale revenue will continue to strongly improve, at 30.2% in July while the figure in June was only 27.3%.

Besides, import and export as well as industrial production are also forecast by Standard Chartered experts to grow by 22.2%, 20% and 15% in July, respectively, against the 20%, 16.3% and 11.5% in June. It is forecast that Vietnam will record a trade deficit in this month.

Economist Tim Leelahaphan said inflation will rise to 3.6% in July, against the 3.4% in June – the fastest pace in the past two years, mainly because of the pressure from the side of supply, while that from the demand side will also gradually rise. For the time being, inflation is still under control, he added.

According to the bank, the fuel prices are rising while those of others in the inflation group remain relatively low. The pressure from prices, especially those on food and fuels, may rise in the second half of this year and in 2023.

After seven consecutive rises since the end of April that have sent the domestic oil and petrol prices up by about 40%, Vietnam has continuously reduced the prices of oil and petrol by about 20% since the start of July. The government has also proposed reducing the import tax on this kind of product to 10% from the previous 20%.

Also on the economic growth, the HSBC recently raised its Vietnam forecast for 2022 to 6.9% from its previous forecast of 6.6%. At the same time, the bank also lowered the country’s growth forecast for the next year to 6.3% from the previous 6.7%.

HSBC experts held that after two quarters of reopening, the recovery of the Vietnamese economy remains a prominent example in the region. The GDP growth in the second half reached 7.7% over the same period last year, easily surpassing the expectations of the market (HSBC: 5.8%; think tanks: 5.9%). This is also the highest quarterly GDP growth Vietnam has ever recorded since 2011, thanks to the vigorous and extensive economic recovery in all the fields.

Along with the Standard Chartered, the UOB held that the strong recovery in Vietnam’s GDP growth in the second quarter of this year was prompted by production activities. It has accelerated in four consecutive quarters and the strong recovery of service activities has gradually regained the growth momentum since the last decrease in the third quarter of 2021.

In the first half of this year, Vietnam’s GDP grew by 6.4% over the same period last year, thanks to the 9.7% growth in production and the 6.6% growth in service activities.

Other monthly data also show that in general, economic activities have moved toward normal again, as restrictions relating to the COVID-19 pandemic have been loosened and borders reopened.

Meanwhile, experts of the Asian Development Bank are maintaining their April forecast for Vietnam’s growth at 6.5% for 2022 and 6/7% for the next year./.