Standard Chartered Bank forecasts that Vietnam’s GDP will increase by 6% this year, lower than the 6.7% previously given.
In today’s updated report, Standard Chartered Bank lowered Vietnam’s growth forecast, citing lower-than-expected first quarter GDP results and challenges from global trade. According to data from the General Statistics Office, GDP in the first quarter of the year increased by 5.66%, while Standard Chartered’s expectation was 6.1%.
However, this forecast is still considered an improvement over last year’s 5% and 0.5 percentage points higher than the World Bank’s latest forecast.
Based on first quarter GDP, Standard Chartered forecasts growth in the second quarter to be 5.3% (down from 6.3%) and for the third quarter to be 6% (down from 7.2%). But fourth quarter GDP is expected to recover to 6.7%.
According to economists from Standard Chartered, trade – an important source of growth and investment for Vietnam – faces challenges in the short and long term. However, the economy is still on the recovery path despite risks. Retail sales increased by 8.2% in the first quarter, reaching nearly 1.54 million billion VND.
World Bank also made a similar assessment, saying that after going through a period of deceleration, Vietnam’s economy has some positive signs in early 2024. In particular, exports recover, consumption and private investment in the country is on the rise.
Regarding inflation, Standard Chartered lowered this year’s forecast from 5.5% to 4.3% because the consumer price index in the first three months of the year was lower than expected. This bank forecasts that interest rates will remain at 4.5% until the end of the third quarter and increase by 50 basis points in the last quarter of the year due to the possibility of increased inflation due to growth-boosting policies.
“With the economy recovering, we think monetary policy will need less support,” said Tim Leelahaphan, Vietnam and Thailand economist at Standard Chartered.
According to him, monetary policy will be balanced based on improvements from external factors and increased foreign exchange reserves. Rising exports supported the currency, while imports also improved. Vietnam’s current account surplus is forecast to reach 3.5% of GDP this year.
Duc Minh
