In its latest economic update report on Vietnam on October 18, Standard Chartered Bank raised its forecast for Vietnam's GDP growth in 2024 to 6.8% (from 6%).
Standard Chartered said the bank raised its forecast for Vietnam's GDP growth in 2024 to 6.8% due to better-than-expected GDP results in the third quarter.
Standard Chartered also forecasts Vietnam’s GDP growth in the fourth quarter of 2024 at 6.9%. The GDP forecast for 2025 remains at 6.7%, with growth expected to pick up to 7.5% in the first half of the year and 6.1% in the second half compared to the same period last year.
According to economists at Standard Chartered Bank, Vietnam’s economic growth momentum is relatively strong, with improvements across many sectors including import and export, retail, real estate, tourism, construction and manufacturing. The recovery in trade and increased business activity and foreign direct investment will be the main growth drivers in 2025 and beyond.
In the first nine months of 2024, disbursed FDI increased by 8% year-on-year, while committed FDI increased by 12% year-on-year. Growth in the manufacturing sector was the main driver of Vietnam’s continued economic expansion, with export growth reaching 15% year-on-year.
Inflation has slowed recently, with Standard Chartered Bank maintaining its inflation forecasts for 2024 and 2025 at 3.7% and 3.8%, respectively. The bank forecasts fourth-quarter inflation at 3.1% year-on-year (3.5% in Q3). Prices for education services, housing and construction materials, healthcare, and food remain sources of upward pressure on inflation.
Mr. Tim Leelahaphan, economist for Vietnam and Thailand, Standard Chartered Bank shared: "Although short-term economic pressure in Vietnam may still exist, we believe that the economy's performance is better than market expectations. The Government's push for economic growth may help maintain low interest rates in the coming time and the Fed's moves will also be a key factor affecting the monetary policy decisions of the State Bank of Vietnam. We expect interest rates to increase by 50 basis points next year, instead of in the fourth quarter of 2024 as previously forecast."
Standard Chartered forecasts that the Fed's interest rate cuts will weaken the USD in the next few quarters, leading to a USD/VND exchange rate of VND24,500 by the end of 2024 and VND24,300 by mid-2025.
Previously, after the third quarter GDP increased to 7.4% despite the impact of Typhoon Yagi, HSBC Bank raised its GDP growth forecast for 2024 to 7.0% (previously 6.5%) and expected the recovery to be stronger and expand to more sectors in the coming quarters. HSBC's GDP growth forecast for 2025 remained unchanged at 6.5%.
Singapore's United Overseas Bank (UOB) has raised its full-year GDP growth forecast to 6.4%. Previously, the bank had reduced its growth forecast for Vietnam to 5.9% after Storm No. 3 made landfall, causing damage of VND81.5 trillion (US$3.6 billion).
The International Monetary Fund (IMF) expects Vietnam's GDP to grow by 6.1% this year, higher than the organization's forecast in June. The ADB maintains its forecast for Vietnam's economic growth at 6%. Meanwhile, Vietnam's GDP target for this year is 6.5 - 7%.
According to Thuy Linh/VTV
Source: https://doanhnghiepvn.vn/kinh-te/standard-chartered-nang-muc-du-bao-tang-truong-kinh-te-viet-nam/20241020080913332
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