(BDT) – In the recently released macroeconomic report on Vietnam, Standard Chartered Bank has lowered its GDP growth forecast for 2024 to 6%, compared to the previous forecast of 6.7%, due to increased growth. The first quarter was lower than expected and challenges came from global trade. However, this forecast is still considered an improvement compared to 5.0% in 2023.
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Standard Chartered also lowered its growth forecast for the second quarter to 5.3% (from 6.3%) and for the third quarter to 6.0% (from 7.2%). But fourth-quarter growth is expected to recover to 6.7%.
According to economists from Standard Chartered, 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.
Standard Chartered also lowered its 2024 inflation forecast from 5.5% to 4.3% due to lower-than-expected first quarter inflation. This 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.
“Vietnam is enhancing its position in the global supply chain, attracting foreign investment thanks to a favorable investment environment and the potential influence of trade relations from the US – China. With the economy on the verge of recovery “In the past, we think that monetary policy will need less support,” commented Mr. Tim Leelahaphan, Thailand and Vietnam Economist, Standard Chartered Bank.
According to Mr. Tim, monetary 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 improved.
Standard Chartered forecasts that the current account surplus will reach 3.5% of GDP by 2024.
Tags: Standard Chartered lowers Vietnams GDP growth forecast
