The bank has lowered the country’s 2023 GDP growth to 5.0% y/y from the previous 5.4%. The revised forecast would require Q4 growth of 7.0% y/y which may still be challenging.
According to the report, macro indicator shows a tentative improvement; trade has yet to signal a clear manufacturing rebound. However, domestic recovery continues and is likely to strengthen further, with a robust retail sales.
Construction, accommodation sectors maintain strong growth year to date; manufacturing has started to expand. External outlook is improving with the current account surplus rising to 3.5% of GDP in 2024 and from 2.0% in 2023.
Inflation forecast for 2023 is revised up to 3.4% y/y from 2.8% previously. The Q4 inflation rate is forecast to reach 4.3% (from 2.7%) and likely to rise higher next year. Inflation may result in search-for-yield behaviour and increased financial instability risks. Notably, education, housing, food, transport costs have been major contributors to the recent inflation drive.
Earlier, the United Overseas Bank (UOB)’s Global Economics & Market Research Unit has cut the full-year growth forecast for Vietnam to 5% from the earlier 5.2%.
Source: vietnamplus.vn