“Viet Nam’s economy showed robust recovery in the first half of 2024 and continues to maintain momentum despite global uncertainties,” said ADB country director for Vietnam Shantanu Chakraborty. “This steady recovery has been driven by improving industrial production and a strong rebound in trade,” he said in an ADB release.

The industrial sector continues to be a primary driver of growth. However, domestic demand remains sluggish, and subdued global economic prospects add uncertainty, ADB noted in the report.

Inflation is expected to remain moderate at 4 per cent for 2024 and 2025, although geopolitical tensions, including the conflict in the Middle East and the Russian invasion of Ukraine, could affect oil prices and potentially boost inflation.

Downside risks that may slow the country’s growth momentum include weak external demand in major economies and geopolitical tensions and uncertainties related to the US election in November possibly leading to trade fragmentation, adversely affecting exports, manufacturing activity and employment.

Raising domestic demand will require stronger fiscal stimulus measures like accelerating public investment implementation, while maintaining low interest rates.

Coordinated policy measures are essential to economic recovery, given relative price stability and weak demand, ADB recommended.

Fibre2Fashion News Desk (DS)