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Vietnam's economy is forecast to grow about 5-5.2% in 2023





Many financial institutions have adjusted their growth forecasts for Vietnam's economy in 2023, after a challenging first six months.

 Retail revenue of goods and services in the first half of 2023 increased by 10.9% over the same period - Photo: QUANG DINH

With the title "Less exciting summer", the report "Vietnam At A Glance July 2023" conducted by experts from HSBC Bank's global economic research group has made a forecast for Vietnam's GDP growth. in 2023 it will be 5.0%, down from 5.2%.

The report expects that the fourth quarter of 2023 will witness a significant recovery of the economy.

After the first 6 months of the year, challenges for Vietnam's economy are still there. With a growth rate of 4.1% over the same period last year, Vietnam's second quarter GDP exceeded the market's expectation of 3.8%. However, this number has dropped sharply from last year's impressive growth of 8%, mainly due to external risks.

Vietnam's exports continued to decline by double digits in the second quarter of 2023, the only bright spot was agricultural exports, but the 10% rate of this industry was too small to compensate for the broad weakness in other sectors. other area. Large shipments, including consumer electronics, textiles and footwear, machinery and wooden furniture, all declined by double digits.

According to experts, the main reason is the decline in US import demand, because the US is the main import market for most products. Currently, Vietnam's exports to the US have decreased by 20% over the same period last year, reflecting the severity of the trade recession.

However, the bright spot of the economy is that Vietnam's service sector has partly compensated thanks to the ongoing recovery. Specifically, tourism-related service industries, including transportation, accommodation and catering, continued to maintain strong growth momentum, increasing by 7.7%.

Previously, the global economic and market research department of UOB Bank (Singapore) also forecast that Vietnam's GDP growth this year will be very difficult to reach 6% as previously forecast and adjusted to 5%. ,2%.

UOB experts believe that the outlook ahead will be challenging, especially in the fourth quarter of 2023 with a high comparative base in the same period last year. The third quarter of 2023 will be an important time because these are the months that often witness a sharp increase in production and export activities ahead of year-end festival demand in developed markets.

To achieve a growth rate of 5.2%, growth in the third quarter must recover to 7% based on the significant improvement of export activities.

However, UOB believes that this means there is still plenty of room for the State Bank to reduce interest rates by another 100 basis points in the third quarter of 2023, to 3.5% for refinancing interest rates, before the Bank State goods temporarily stopped to assess the impacts.

Meanwhile, the latest national assessment report on Vietnam completed at the end of June 2023, the International Monetary Fund (IMF) forecast Vietnam's growth at 5.8%.

According to