Standard Chartered lowers Vietnam GDP forecast for the second quarter of 2024 to 5.3%

In particular, Standard Chartered has lowered its growth forecast for the second quarter of 2024 to 5.3% (from 6.3%) and the third quarter of 2024 to 6.0% (from 7.2%). 2024 is expected to recover to 6.7%, equal to the fourth quarter of last year.

Standard Chartered also lowered its 2024 inflation forecast from 5.5% to 4.3% because inflation in the first quarter of 2024 was lower than expected. The bank forecasts that interest rates will be kept at 4.5% until the end of the third quarter and may increase by 50 basis points in the fourth quarter to face the possibility of inflation due to growth promotion.

According to an economist from Standard Chartered Bank, trade, an important source of growth and investment for Vietnam, also faces short- and long-term challenges. However, Vietnam’s economy is still on the recovery path despite risks. Retail sales still grew strongly in the first quarter.

Despite lowering Vietnam’s GDP growth forecast, compared to 2023, Standard Chartered estimates that 6.0% is still considered improved compared to the previous period.

Standard Chartered’s forecast reduction is due to lower-than-expected growth in the first quarter of 2024, only 5.7%, and challenges from global trade in the short and long term.

Standard Chartered experts said that Vietnam is enhancing its position in the global supply chain, attracting foreign investment thanks to a favorable investment environment.

VND policy will be balanced based on improvements from external factors and increased foreign exchange reserves. Strong export growth will support the currency while imports also improve. The bank forecasts the current account surplus will reach 3.5% of GDP by 2024.

Recently, in the Vietnam Economic Situation Update report for April 2024 of the World Bank (WB), it was also noted that Vietnam’s economy is showing different signs of recovery and forecasts of economic growth. will reach 5.5% in 2024 and gradually increase to 6% in 2025.

According to the World Bank, exports are recovering, expected to increase by 3.5% in 2024; Domestic private consumption and investment are also on the rise. The real estate sector is expected to recover stronger at the end of this year and next year. Inflation is forecast to increase slightly to 3.5% in 2024.

The Asian Development Bank (ADB) in its April 2024 update report forecasts that Vietnam’s economy will grow by 6% in 2024 and 6.2% in 2025.