Domestic and foreign growth drivers
Global economic growth is forecast to recover slightly in 2024 at around 3%, a low base in recent years, reflecting the major challenges countries are facing: Persistent high inflation and difficulty in approaching the target inflation rate of many countries; The real estate market crisis continues to drag on in many countries, affecting many supporting industries; The spillover effects from the conflict in Ukraine - Russia, Israel and Hamas, or the war in the Red Sea to the global supply chain.
Organizations have unanimously given their predictions for global GDP growth in 2024 in the range of 2.9% - 3.1%.
VietinBank Securities (HoSE: CTS) forecasts that the recovery of the global economy in 2024 depends on the monetary policy reversal cycle of central banks around the world, especially the FED and ECB. In addition, falling energy prices and low background food prices also contribute to reducing inflation in many countries around the world.
VietinBank Securities assessed that the economic growth momentum in 2024 depends on the Government reducing interest rates.
For developed economies, inflation is likely to fall to around 3% in 2024. For developing economies and emerging markets, inflation is expected to reach around 3.5% - 4% in 2024. However, it is still necessary to note the risk that inflation may increase again due to unpredictable developments in energy and food prices, as these are items that account for a large proportion in calculating inflation.
Meanwhile, VietinBank Securities forecasts Vietnam's GDP growth in 2024 based on three positive - baseline - negative scenarios, respectively, with GDP growth reaching 6.5% - 6% - 5.5% and CPI reaching 4% - 3.5% - 3%, depending on international trade activities and investment flows from foreign enterprises (FDI).
In the context of forecasts that central banks around the world will stop raising interest rates and may start cutting interest rates in 2024, Vietnam will not face too many challenges in controlling inflation.
VietinBank Securities forecasts that inflation in 2024 will continue to be well controlled, reaching the Government's target. However, inflationary pressure will still exist when the El Nino phenomenon persists and geopolitical tensions continue. In addition, it should be noted that prices of some essential domestic goods, including electricity, gasoline, and food, may also be on an upward trend.
This securities company assessed that the economic growth momentum in 2024 depends on the Government reducing interest rates while ensuring stable exchange rates and inflation, so measures to increase money supply through stimulating public investment and reducing taxes on a number of key items including imported goods, gasoline, electricity, and water to increase domestic demand will continue to be applied.
VN-Index may reach 1,320 points
With the above macro impacts, VietinBank Securities forecasts that VN-Index may end 2024 around 1,250 - 1,270 points.
In the positive scenario, the VN-Index fluctuates quite a bit around 1,290 - 1,320 points. The conditions for this scenario to occur include: The Fed implements a strong monetary easing policy from April to the end of 2024 and is not under pressure from recession, creating more room for the SBV to reduce or maintain low operating interest rates; PBOC strongly stimulates the Chinese consumer market through a series of measures, especially sharply reducing operating interest rates; The average growth rate of listed enterprises reaches 9 - 10%.
In the negative scenario, VN-Index fluctuates negatively due to the impact of macro and micro conditions, the index may adjust to the threshold of 1,140 - 1,150 points by the end of 2024. The conditions for this scenario to occur include: Inflation in the US continues to remain high, forcing the Fed to maintain high interest rates longer than expected, the US falls into recession, forcing the SBV to raise the operating interest rate again; PBOC's economic stimulus measures are not effective, consumer demand in the Chinese market continues to weaken; The average growth rate of listed enterprises reaches an increase of less than 3%.
VietinBank Securities forecasts that steel prices may increase by 3-4% in 2024.
Regarding the industry group, steel consumption demand is forecast to increase in 2024. Concerns about supply and high material costs are assessed by CTS to have "cooled down" compared to 2023. This securities company forecasts that steel consumption demand may increase slightly again due to the controlled energy shortage situation in the world, difficulties in transportation and logistics costs have been resolved, promoting strong public investment in countries around the world.
The impetus from promoting public investment can help the steel industry develop in the second half of the year, we forecast that steel prices may increase by 3% - 4% in 2024. This is a positive sign for steel production and trading enterprises such as HPG, NKG, HSG.
In addition, China's support packages for the real estate and construction sectors will boost steel demand - China is also one of the largest steel consuming countries in the world.
During the period from 2014 to 2023, the retail growth rate always increased from one and a half to double the national GDP growth rate except during the Covid-19 period (2020 - 2021). Meanwhile, the contribution of retail to GDP growth was 59% in 2023. Also in this year, the retail growth rate reached 10%, double the GDP growth rate of 5%.
Therefore, entering 2024 with the expectation of economic recovery and GDP growth rate forecasted from 6% - 6.5%, VietinBank Securities can fully expect outstanding growth in the retail industry .
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