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UOB says Vietnam’s economy gains momentum in Q4

The Saigon Times

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HCMC – Vietnam’s economy is poised for a robust recovery in the fourth quarter of 2023, according to a report from the United Overseas Bank (UOB).

The report, released on December 8, highlights a consistent acceleration in production since May, suggesting a potential continuation of this growth trend into 2024.

UOB’s Market Research and Global Economics division has forecast a significant surge in Vietnam’s real GDP growth, reaching 5.33% in the third quarter of 2023, compared to 4.14% in the second quarter. This growth is attributed to improvements in trade, domestic manufacturing, and consumption activities, after the difficult first half of 2023.

Data from October to November further supports the trend of economic stability, with notable improvements in the retail and industrial sectors. Retail sales of goods and services recorded a 10.1% increase in November, marking the fastest growth since May.

The industrial production sector also recorded growth, with 5.8% in November, driven by a 6.3% rise in manufacturing output. Cumulatively, industrial production has grown by 1.0% in the year to date.

The State Bank of Vietnam’s reductions of key interest rates and the recent 2-percentage-point cut in the value-added tax (VAT) are among the policy measures aimed at easing the financial burden on businesses.

Vietnam’s real estate market is showing signs of stability and recovery, with investors resuming sales activities and launching new projects, UOB noted in its report.

Despite the stronger growth forecast in the third quarter, challenges from the first half of the year continue to limit the full-year growth rate.

UOB experts anticipate that the momentum from the third quarter will carry into the final quarter, maintaining a full-year growth forecast of 5%. The projected real GDP growth rate for Q4 2023 is 7.0% compared to the same period last year. This suggests that Vietnam’s economy is well-positioned for a positive trajectory, with potential for sustained growth in the coming year.

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