HCMC – Standard Chartered Bank expects Vietnam’s economic growth to moderate in the third quarter of this year, according to its macroeconomic update released today, October 5.
The bank forecast Vietnam’s GDP in Q3 would expand by 5.1% year-on-year, down from 6.9% in the previous quarter. This translates to a seasonally adjusted quarterly growth rate of 1.0%.
Data from Standard Chartered showed a slowdown in retail sales and export growth in September. Retail sales growth decelerated to 5.2% year-on-year, down from 7.9% in August, while export growth dipped from 14.5% to 6.2%.
Imports and industrial production growth also cooled in September. Imports grew at a slower pace, at 4.0% year-on-year, down from 12.4% in August, while industrial production rose by 4.2%, compared to 9.5% in the previous month.
Despite the overall slowdown, electronics exports continued a positive performance in September, and Vietnam’s trade surplus was estimated at US$2.5 billion, according to the bank’s analysts.
The total amount of FDI capital that was disbursed in the first eight months of this year increased by 8% year-on-year, led by the manufacturing sector.
Vietnam’s inflation rate was down in September, easing to 2.7% year-on-year from 3.5% in August. This marks the second consecutive month with inflation below 4%.
While the downward trend is encouraging, the bank warns that rising costs in sectors such as education, housing, healthcare, and food could continue to push prices higher.
Tim Leelahaphan, economist for Thailand and Vietnam at Standard Chartered Bank, suggested that the central bank reconsider the magnitude of its planned interest rate hike in the fourth quarter of the year.
Leelahaphan identified subdued credit growth, a stronger Vietnamese dong, and lower inflation as factors that could lead to a less aggressive rate increase. He noted that credit growth has slowed to 7.4% year-to-date, compared to the average of 9.0% in the period between 2013 and 2023.
