Vietnam's economy in 2024 is promising, with growth of 6% or more

Vietnam's economy in 2023 continues to recover with many outstanding bright spots. Entering 2024, many international financial institutions have given optimistic assessments and comments on Vietnam's GDP growth rate, all of which forecast an increase of 6% or more.

Standard Chartered Bank experts assess that Vietnam's economic prospects in the medium term are still promising.

In its recently released global research report on Vietnam titled “Vietnam – Stronger but not Easier”, Standard Chartered Bank Vietnam forecasts Vietnam’s GDP growth to reach 6.7% in 2024 (forecasted at 6.2% in the first half of the year and 6.9% in the second half of the year).

Vietnam’s medium-term economic outlook remains promising, said Tim Leelahaphan, economist for Thailand and Vietnam at Standard Chartered Bank. To maintain growth and competitiveness, Vietnam needs to develop infrastructure and reduce carbon emissions.

According to economists at Standard Chartered Bank, retail sales and industrial production remain strong despite the recent correction. Imports and exports are starting to recover, although e-commerce has yet to show clear signs of recovery. With inflation concerns returning, inflation is forecast to rise from 3.3% in 2023 to 5.5% in 2024.

Similarly, assessing Vietnam's growth rate in 2024, HSBC Bank commented that Vietnam is recovering on schedule, with the potential to regain the trend growth rate of 6% in 2024.

As FDI inflows continue to increase production capacity, Vietnam’s manufacturing sector will show signs of recovery, providing opportunities for exports. While the impact of the 15% minimum corporate tax rate needs to be monitored, the impact is still manageable.

HSBC experts expect inflation to continue to increase slightly in 2024, forecast at 3.4%, much lower than the new inflation target of 4-4.5%.

Despite the broad-based trend of disinflation in Vietnam, price pressures have not completely disappeared. The risk of rising inflation from energy and food remains, especially given Vietnam’s sensitivity to these commodities due to their large weight in the inflation basket.

VinaCapital also believes that 2024 will be a stronger year for the Vietnamese economy, driven by a recovery in manufacturing and improved consumer sentiment. The lower interest rates in 2023 will also support the recovery of the real estate market, just as they supported the stock market before.

Commenting on the 2024 outlook for Vietnam's economy, Mr. Michael Kokalari, Director of Macroeconomic Analysis and Market Research at VinaCapital, analyzed that Vietnam's GDP growth is expected to reach 6-6.5% in 2024, driven by a recovery in the manufacturing sector and improvements in consumer sentiment and spending.

Regarding consumer demand, VinaCapital economists expect manufacturing to recover well this year. Consumer demand will not increase sharply in 2024 because the wave of foreign tourists to Vietnam boosted consumption last year and will be unlikely to repeat this year.

Vietnamese consumer spending (excluding tourists) has also started to recover since late 2023 due to improvements in the labor market and as Vietnam’s “frozen” real estate market has started to move positively thanks to lower interest rates. Low interest rates have also supported the stock market in 2023, but VinaCapital expects interest rates to stabilize much more in 2024 and stock market investors to return to focus.

(according to VNA)

Source: https://baoquocte.vn/chuyen-gia-quoc-te-kinh-te-viet-nam-2024-day-hua-hen-muc-tang-truong-tu-6-tro-len-257264.html