International financial institutions optimistic about Vietnam’s growth

Though some concerns remain relating to inflation, international financial institutions still have confidence in Vietnam’s post-pandemic recovery.

Assessing the country’s economic development in the first half of the year, Mr. Tim Leelahaphan, economist in charge of Thailand and Vietnam at Standard Chartered Bank, said the economic recovery process has shown positive signs and macro-economic indicators are forecast to continue to recover.

“The recovery of the economy will be stronger in the second half of the year, especially when the tourism sector is reopened after two years of closure,” he emphasized.

Meanwhile, the Asian Development Bank (ADB) has maintained its economic growth forecast for Vietnam at 6.5 per cent in 2022 and 6.7 per cent in 2023. These are both higher than in Asia-Pacific as a whole, making Vietnam a highlight in the region.

According to the ADB, Vietnam’s growth has been driven by factors such as the continued expansion of trade, a faster-than-expected recovery in manufacturing, domestic travel, and public investment disbursement.

At the same time, though higher global commodity prices, especially global oil prices, will increase inflationary pressure, it believes that Vietnam’s abundant food supply will help it ease inflation this year.

In its latest “Vietnam at a Glance” report, HSBC forecasts Vietnam’s growth in 2022 at 6.9 per cent, but at the same time lowers its 2023 forecast to 6.3 per cent. The main reason for the change is concerns over inflation.

According to Standard Chartered Bank, price pressure, especially on food and fuel, in Vietnam is likely to increase in the second half and into 2023. With inflationary pressure in place, it forecasts GDP growth of 10.8 per cent in the third quarter and 3.9 per cent in the fourth quarter. Growth for the year as a whole would then be 6.7 per cent.