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VinaCapital projects Vietnam’s GDP growth at 6.5% in 2024

The Saigon Times

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HCMC – Investment management firm VinaCapital has projected Vietnam’s GDP could expand by 6.5% next year, signaling an acceleration from the slowdown this year.

The forecast, shared by Michael Kokalari, VinaCapital’s chief economist, in a report issued on October 23, aligns with key insights from the company’s recent annual investor conference.

Kokalari emphasized the critical impact of GDP growth on short-term stock market movements, as it correlates with company earnings growth.

The anticipated deceleration of Vietnam’s GDP growth, from 8% in 2022 to 4.7% in 2023, can be attributed to various factors. Demand for “made-in-Vietnam” products, particularly of the U.S., Vietnam’s leading foreign market, has dropped significantly, with exports falling nearly 20% year-over-year in the first nine months of 2023.

Domestic consumption has also grown at a slower pace than in the pre-Covid years, when it registered growth of 8-9%.

However, there have been some positive indicators. Foreign tourist arrivals in 2023 have reached nearly 70% of the pre-Covid levels, providing much-needed support for Vietnam’s GDP expansion. Kokalari’s optimism for 2024 centers on the expected resurgence of the manufacturing sector.

The slowdown in 2023 is primarily attributed to excess inventory among U.S. retailers in 2022, as they anticipated a post-Covid consumer shopping boom. Instead, a shift in consumer behavior favors services like travel and dining out, negatively affecting Vietnam’s exports and manufacturing output.

The elevation of relations between the U.S. and Vietnam to a comprehensive strategic partnership is highly expected to drive up U.S. investments in Vietnam.

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