HCMC – Singapore’s United Overseas Bank (UOB) has raised its GDP growth forecast for Vietnam to 6.4% in 2024, up from its earlier projection of 5.9%.
The adjustment takes into account Vietnam’s year-to-date economic performance, along with potential disruptions in early Q4 caused by typhoon Yagi.
According to UOB, Vietnam’s third-quarter economic growth exceeded both the market’s expectations of 6.1% and UOB’s prior forecast of 5.7%.
The country posted a 6.82% growth rate in the first nine months of the year, demonstrating a robust recovery, though not quite reaching the higher levels seen in 2022.
UOB experts attributed the strong Q3 performance to the continued recovery of business and production activities after the Covid-19 pandemic. However, they warned that economic growth in Q4 could slow to 5.2%, down from 7.4% in Q3, due to potential disruptions in production in October and November.
Factors such as declining inflation, global monetary easing, and the aftermath of Yagi are expected to influence the State Bank of Vietnam’s monetary policy. However, UOB analysts believe that the strong economic recovery and the risk of inflation resurging will limit further monetary easing.
UOB predicts the central bank will maintain its refinancing rate at 4.5% for the rest of the year, while prioritizing credit growth and other support measures to sustain economic momentum.
