HSBC raises Vietnam's growth forecast for '22 but lowers 2023 outlook

23 Dec '22

2 min read

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Hongkong and Shanghai Banking Corporation (HSBC) has raised Vietnam’s growth forecast to 8.1 per cent, previously 7.6 per cent, for 2022, but the country’s 2023 growth outlook has been reduced to 5.8 per cent from 6 per cent. This year, Vietnam showed strong economic recovery, despite global economic slowdown, proving to be one of Asia’s top performers.

Vietnam’s GDP rose 13.7 per cent year-on-year in the third quarter (Q3) of 2022, mainly because of a resilient external sector and robust domestic demand, according to HSBC's 'Asian Economics Quarterly – Retooling Factory Asia' report.

After growing over 17 per cent YoY in the first three quarters of 2022, export growth moderated sharply in October. November 2022 saw the first meaningful on-year decline in two years.

The growth in 2022 still benefits from the advantages in Vietnam’s post-pandemic reopening, but challenges will have heavier impacts on the country next year, especially when the effects of reopening are fading and the impacts of high inflation are clearer.

Export decline was seen in fields including garment and footwear. Specifically, the US’ economic downturn makes the situation worse as the US is the largest market for many Vietnamese exports.

Vietnam’s unemployment rate reduced to 2.3 per cent as of the third quarter of this year, which is a positive sign in the country’s economic outlook.

The country has started to witness strong inflation pressure, according to HSBC experts.

HSBC recently slightly reduced its inflation forecast for Vietnam in 2022 from 3.4 per cent to 3.2 per cent, but the lender has also raised its inflation forecast for 2023 to 4 per cent instead of the previously projected 3.7 per cent.

Fibre2Fashion News Desk (DP)

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