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Saturday, June 15, 2024

Standard Chartered forecasts Vietnam’s 2024 GDP at 6.7%

The Saigon Times

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HCMC – Standard Chartered Bank has projected Vietnam’s GDP growth at 6.7% this year following a 5.05% expansion in 2023.

This projection is 0.2 percentage point higher than the target approved by the National Assembly. The bank’s forecast breaks down to 6.2% growth in the first half of the year, with an anticipated 6.9% in the second half.

“We still have a conviction on Vietnam’s high growth potential over the medium term,” Tim Leelahaphan, economist for Thailand and Vietnam at Standard Chartered, said in the bank’s recently published global research report on Vietnam titled “Vietnam – Stronger but not easier”.

“To maintain a stable economic expansion rate and competitive edges, Vietnam needs to upgrade its infrastructure and cut down on greenhouse gas emissions.”

Despite recent adjustments, Vietnam’s retail sales and industrial production have shown resilience. Exports and imports have improved, but foreign direct investment (FDI) remains subdued, with global trade challenges posing potential risks.

Inflation is expected to rise in 2024, potentially reaching 5.5%, compared to 3.3% in 2023. Standard Chartered predicts that refinancing rates will remain stable at 4.5% until the end of the third quarter of 2024, followed by a 50-basis-point increase in the final quarter.

Leelahaphan suggested that the central bank should adopt a balanced approach to support economic recovery while preventing a rise in inflation and currency depreciation.

The forecast for the U.S. dollar-Vietnam dong exchange rate at the end of 2024 is VND24,000 per dollar, along with a recovery in foreign exchange reserves as the strength of the U.S. dollar weakens.

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