HCMC – Standard Chartered Bank has revised down its 2024 GDP growth projection for Vietnam to 6% from the previous 6.7%, citing lower-than-expected growth in the first quarter and global trade disruptions.
In its recent macroeconomic updates on Vietnam, the bank also adjusted down its GDP growth forecast for the second quarter to 5.3% from 6.3%, and for the third quarter to 6.0% from 7.2%. However, a recovery is anticipated in the final quarter, with GDP growth expected to rebound to 6.7%.
Trade, a significant driver of growth and investment for Vietnam, faces both short and long-term challenges, according to Standard Chartered. Despite these risks, Vietnam’s recovery remains resilient, with robust retail sales growth observed in the first quarter.
Standard Chartered lowered its inflation forecast for 2024 to 4.3% from the previous 5.5%, reflecting lower-than-expected inflation in the first quarter.
The bank anticipates interest rates to remain unchanged at 4.5% until the end of the third quarter, with a potential increase of 50 basis points in the fourth quarter in response to growth-driven inflation.
“Vietnam is improving its position in global supply chains. Foreign investment continues to flow in due to a favorable investment environment and potential ramp-up of U.S.-China trade tensions,” said Tim Leelahaphan, an economist for Thailand and Vietnam at Standard Chartered.
“With economic recovery starting to gain momentum, we think there will be less need to provide monetary policy support.”
