7.2% GDP growth projected for Vietnam in 2023: Standard Chartered

07 Jan '23

2 min read

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Vietnam’s economy will continue to vigorously expand this year due to strong recovery last year, according to Standard Chartered, which recently forecast a gross domestic product (GDP) growth of 7.2 per cent for the country in 2023 and slow down to 6.7 per cent in 2024. The bank’s projection is 0.7 per cent higher than the government’s target.

The 6.5 per cent growth target by the government is a big challenge when the global economy is at risk of recession, experts feel. Domestic inflationary pressures are high, while businesses find it difficult to maintain and expand production.

But Standard Chartered still believes in Vietnam’s strong growth potential in the medium term, said Tim Leelahaphan, its economist for Thailand and Vietnam.

Though certain major macro indicators started slowing down in the fourth quarter last year, he said they remained strong. Besides, retail sales grew well in the second half last year, fuelling confidence in the domestic market.

Trade balance is likely to improve, with exports facing global challenges and imports declining. Disbursed foreign direct investment is set to grow further, but the outlook will depend on the global economy, according to a Vietnamese media report.

The bank sees inflation as a threat to the country’s continued recovery this year. Inflation is projected to increase throughout the year, reaching around 6 per cent in the final months of the year and averaging 5.5 per cent in both 2023 and 2024.

Fiscal deficit is likely to continue in 2023 that could prompt inflation to rise during the year, the bank added.

ALCHEMPro News Desk (DS)

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