HCMC – HSBC keeps its forecast for Vietnam’s GDP growth at 6.5% for both 2024 and 2025 despite the impact of typhoon Yagi.
The bank’s Global Research division said in its “Asian Economics Quarterly” report that Vietnam’s economy is expected to continue its robust recovery, driven by a rebound in manufacturing and easing inflation.
The manufacturing sector has shown strong signs of recovery, with the purchasing managers’ index (PMI) remaining above the expansionary threshold for five consecutive months.
Vietnam’s exports have seen double-digit growth, boosted by increased market access for agricultural products. The country remains a bright spot for foreign direct investment in ASEAN, with the newly amended Land Law expected to further boost inflows.
HSBC expects inflation to average 3.6% in 2024 and 3.0% in 2025, way below the State Bank of Vietnam’s cap of 4.5%.
The country has welcomed over 11 million international visitors in the year to date, gaining a 26% increase in tourism revenue during the first eight months of the year. This strong performance has helped to bolster other related sectors, such as retail.
Still, typhoon Yagi caused substantial damage and disrupted economic activities, resulting in an estimated initial cost of US$1.6 billion. Although the economic impact is expected to be temporary, the storm still had a major effect on Vietnam’s growth.
