HSBC forecasts rising 2022 growth and inflation

Vietnam’s economy is forecast to maintain its steady growth in 2022 but is likely to also post rising inflation, according to an HSBC report.

The report forecasts Vietnam’s growth to stand at 6.2 per cent; among the highest in the region. It also believes inflation will be 3.7 per cent, which while high will still be basically under control.

Vietnam had a good start to 2022, it went on, with GDP in the first quarter up 5 per cent over the same period last year. Its recovery momentum has been stable thanks to internal and external growth pillars, while the reopening of its borders will certainly boost tourism revenue.

However, there remain obstacles facing Vietnam, including high world oil prices, which push up gasoline costs and adversely affect the trade balance. High transportation costs are still the main issue affecting many businesses. High fuel prices also increase living costs and slows the recovery in personal consumption.

Rising world oil prices are likely to push up inflation, and the country needs to tighten its monetary policy to control it.