HCMC – Vietnam’s economic growth is seen moderating in the first quarter of this year, with a forecast expansion of 6.1% year-on-year, down from the 6.7% growth observed at the end of 2023, according to a new report from Standard Chartered Bank.
Despite this slowdown, analysts remain optimistic about Vietnam’s economic recovery. While growth may be slower in the first half of the year at 6.2%, it is projected to pick up in the second half, reaching 6.9%.
The bank maintains its overall growth forecast for Vietnam at 6.7% in 2024.
In March, data indicated a post-Lunar New Year recovery driven by strong retail sales. Experts predict retail sales to increase by 9.2% year-on-year, while exports are expected to rebound by 5.2%.
Imports are projected to expand by 5%, resulting in a narrowing trade surplus of US$0.8 billion.
Inflation remains a significant concern, with the potential to rise by 4.2% year-on-year in March. Rising costs in education, housing construction, and food are the primary factors spurring inflation.
“Despite the likely Q1 slowdown, we think Vietnam’s recovery remains intact,” said Tim Leelahaphan, economist for Thailand and Vietnam at Standard Chartered Bank. “However, we are cautious on the H1 growth outlook due to headwinds to global trade.”
The bank expects the State Bank of Vietnam, the central bank, to maintain its refinancing rate unchanged through the third quarter of 2024. To address rising inflation associated with growth, analysts anticipate a rate increase in the last quarter of the year.
