HCMC – The State Bank of Vietnam (SBV) will keep its refinancing rate steady at 4.5% throughout 2024 to prop up the nation’s economic recovery, the United Overseas Bank (UOB) said in a report.
UOB said Vietnam’s economic rebound, with GDP growth reaching 5.33% in the third quarter of this year, up from 4.14% in the previous quarter. This recovery was driven by stronger trade, increased manufacturing output, and revived domestic activities, following the sluggish first half of the year.
Data from October to November indicated sustained stabilization and significant improvements compared to earlier this year. Manufacturing output, which previously registered negative readings in May, has consistently accelerated, signaling momentum likely to extend into 2024.
UOB experts forecast this momentum would continue into the final quarter, supported by forthcoming domestic policies. The bank has maintained its full-year growth forecast for Vietnam at 5%, projecting a further acceleration of real GDP growth to 7% year-on-year in Q4.
UOB’s updated exchange rate forecasts give a downward trajectory, at VND24,000 to the dollar in the first quarter of 2024, VND23,800 in the second, VND23,600 in the third, and VND23,500 in the fourth.
HSBC’s global research team aligns with UOB’s projection, anticipating the SBV to retain its 4.5% key interest rate throughout 2024, emphasizing support for economic growth and recovery.
While inflation remains under control, and economic prospects, especially externally, appear robust, cautionary notes are sounded regarding potential inflationary risks.
In November, Vietnam’s Purchasing Managers’ Index (PMI) declined to 47.3, reflecting reduced production volumes and order numbers, prompting vigilance amid positive economic indicators.
