HSBC maintains forecast for Vietnam's GDP growth at 6.5%

(Dan Tri) - HSBC experts maintain their forecast for Vietnam's GDP growth for both 2024 and 2025 at 6.5%, despite the damage from Typhoon Yagi.

The content is mentioned in the report on the Asian economic situation recently released by HSBC Global Research. Accordingly, HSBC assessed that the super typhoon Yagi, which made landfall on September 7, had a particularly heavy impact on Vietnam. It is known that the government has estimated the preliminary damage at up to 1.6 billion USD, recording widespread flooding and damage to many factories, warehouses, and power infrastructure. Although efforts to recover and restore operations are underway, the aftermath of the strongest typhoon to hit Asia this year to date is forecast to last for many more weeks. However, the report also clearly stated that HSBC experts expect potential positive possibilities to offset the temporary economic losses caused by super typhoon Yagi.

HSBC forecasts Vietnam's GDP growth at 6.5% (Photo: Tuan Anh).

HSBC experts said that Vietnam is expected to see further growth as the recovery continues to be solid, the manufacturing sector is growing strongly and inflation is moving in a more favorable direction. In particular, the demand for goods will improve further and play a decisive role in the level of Vietnam's recovery as Western markets account for nearly half of Vietnam's exports. Therefore, the market needs to closely monitor trends and consumer spending in the West. The analysis team said that policies such as reducing environmental protection tax on fuel and value-added tax on some goods and services until the end of 2024 will support domestic industries, especially retail, which is growing at a lower rate than the pre-pandemic trend. In addition, the revised Land Law, which will take effect from August, will have a positive impact on the real estate industry's prospects. Despite its recent passage, the revised Land Law appears to have contributed to a boost in foreign investment in the sector, with recent FDI figures showing a broad-based increase, the analysts said. In terms of inflation, price developments are trending more favourably in the second half of the year as the base effect is less favourable due to the gradual decline in energy. An expected easing cycle by the US Federal Reserve (Fed) will also help ease some of the pressure on the exchange rate. Considering all the above factors, HSBC maintains its 2024 inflation forecast at 3.6%, quite low compared to the State Bank of Vietnam's target ceiling of 4.5%. The firm also maintains its 2025 inflation forecast at 3%. Previously, United Overseas Bank (UOB) lowered its growth forecast for Vietnam this year due to Typhoon Yagi, from 6% to 5.9%. UOB expects the impact of this storm to be felt more clearly in the late third quarter and early fourth quarter in the North.

Dantri.com.vn

Source: https://dantri.com.vn/kinh-doanh/hsbc-duy-tri-du-bao-tang-truong-gdp-viet-nam-dat-65-20240930172944619.htm