Many international leading banks have recently raised their forecast for Vietnam’s gross domestic product (GDP) growth this year, following data on the country’s higher-than-expected economic expansion in the third quarter.
A woman is seen shopping at a supermarket in Vietnam. Photo: Quang Dinh / Tuoi Tre
On the back of strong exports, industrial production, and services, Vietnam posted an economic growth rate of 7.4 percent in July-September, or 0.7 percentage points above the target, according to the General Office of Statistics (GSO).
Commenting on this result, HSBC’s global research department lauded Vietnam for posting third-quarter growth that was much higher than expected despite the severe aftermath of recent typhoon Yagi, which has caused estimated damage of up to VND100 trillion (US$3.95 billion).
After experiencing a hard time during 2023 and the first quarter of 2024, Vietnam has returned to being the growth star of ASEAN, posting a year-on-year GDP growth rate of 7.4 percent, beating HSBC’s expectation of 6.2 percent.
Based on a stronger-than-expected economic performance, the bank has raised its 2024 GDP growth forecast for Vietnam to seven percent from 6.5 percent in its recently issued report.
The bank noted a robust recovery in foreign trade, with textile and footwear exports seeing a 16.7 percent year-on-year increase.
Like HSBC, Standard Chartered Bank has also raised its 2024 GDP growth forecast for the Southeast Asian country to 6.8 percent from the previous expectation of six percent.
Experts from the bank say Vietnam’s economic growth momentum is relatively strong, with improvements in many areas such as export and import, manufacturing, retail, real estate, and tourism.
“While we remain cautious on Vietnam’s economy near-term, we also acknowledge the economy’s ability to perform better than market expectations,” Tim Leelahaphan, Standard Chartered Bank economist for Thailand and Vietnam, said in a recent statement.
The government’s push for stronger economic development may help maintain future low interest rates, and the U.S. Federal Reserve’s moves will also be key to the State Bank of Vietnam’s monetary policy decisions.
“We now expect a 50-basis-point rate hike next year, rather than in the last quarter of 2024 as previously anticipated,” added the economist.
Similarly, Singapore’s United Overseas Bank has also rivised its forecast for Vietnam’s full-year economic growth up by 0.5 percentage points to 6.4 percent.
The Asian Development Bank and the World Bank, meanwhile, have recently projected a lower growth rate, at six percent and 6.1 percent respectively, for Vietnam this year.
Experts from domestic economic units have also heightened their expectations for Vietnam’s economic outlook in 2024, basing it on the positive economic data reported by the GSO in the third quarter.
Ho Chi Minh City-based Vietcap Securities JSC’s analysts enhanced its GDP growth forecast from 6.5 percent to 6.9 percent on the basis of a stronger-than-expected recovery in manufacturing and exports in the first nine months.
Vietcap expected high economic growth to be maintained in the fourth quarter thanks to government policy that supports measures such as extending the VAT reduction period and elevating the basic salary of the public sector by 30 percent.
Besides, Hanoi-based MB Securities JSC’s analysis team has raised its projection for Vietnam’s GDP expansion in 2024 to 6.9 percent from 6.5 percent.
Meanwhile, the government continues to strive toward achieving an economic growth rate of seven percent for the whole year, higher than the target of six to 6.5 percent previously set by the National Assembly.
The Vietnam Institute for Economic and Policy Research has set out two growth economic scenarios for 2024.
In the first scenario, the growth rate for the last quarter is projected at 7.4 percent, bringing the overall annual growth to the government’s target of seven percent.
In the second, the growth rate is expected to fall below seven percent, resulting in an overall growth rate of around 6.84 percent for the year.
On October 9, Minister of Planning and Investment Nguyen Chi Dung announced at a National Assembly session that Vietnam has set a GDP growth target of 7-7.5 percent for 2025, which would elevate the size of its economy to the top 33 in the world.
With such an economic expansion, the Southeast Asian country expects to push the economy in 2025 to $500 billion from the 2024 estimate of $460 billion, and raise its per capita income to about $4,900 next year from the anticipated $4,647 for 2024, the minister said.
Vinh Tho – Binh Khanh (Source: tuoitrenews.vn)
