UOB Singapore raises Vietnam's 2022 GDP growth forecast to 7%

The country’s real GDP growth surprised in the second quarter (Q2), expanding by 7.7 per cent year on year (YoY) from 5 per cent in Q1, data released by the General Statistics Office (GSO) showed. That surpassed UOB’s estimate of 6 per cent YoY.

Manufacturing activities, which accelerated for the fourth straight quarter, and a recovery in services output drove the sharp rebound in Q2 GDP.

Vietnam’s GDP rose by 6.4 per cent YoY in H1 2022 on the back of a 9.7 per cent gain in the manufacturing sector and 6.6 per cent in services output.

Activities have generally returned to normal after restrictive measures to contain the pandemic were eased and borders reopened, other monthly data released suggest.

Inflationary pressures are manageable as the main source of impact is related to energy while food prices are stable, UOB said, cautioning that upside risks are significant given the rapid pace of gains in energy prices, which will eventually spread to the rest of the economy, especially if higher prices persist, according to Vietnamese media reports.

UOB added that despite these uncertainties and a more robust domestic economy, there is scope for the State Bank of Vietnam (SBV) to remain patient and keep its policy rate steady for now to support recovery efforts.

ALCHEMPro News Desk (DS)