UOB raises 2024 Vietnam GDP growth forecast to 6.4% from 5.9% earlier

The bank also retained its 2025 GDP growth forecast of 6.6 per cent for the country, reflecting the anticipated increase in output at the beginning of next year to compensate for the losses incurred from the typhoon, as well as the spillover effects from the US Federal Reserve’s easing policies and China’s economic stimulus measures.

UOB updated its forecast after Vietnam announced a GDP growth of 7.4 per cent in the third quarter (Q3) and 6.82 per cent in the first three quarters.

Yagi hit north Vietnam on September 6, triggering flash floods and landslides, leading to economic losses worth more than $3 billion.

Manufacturing and services continue to be the primary drivers of business activities in the country, while foreign trade maintained strong momentum in Q3 2024.

Inflation rate slowed down to 2.6 per cent in September compared to 3.45 per cent in August. Q3 2024 saw the consumer price index (CPI) fall to 3.5 per cent, down from 4.4 per cent in Q2. The average CPI increase so far has slowed to 3.9 per cent year on year (YoY), down from a peak of 4.1 per cent in July, which is lower than the central bank’s target of 4.5 per cent.

Other data from the third quarter of 2024 also reflect the overall resilience of the economy, a domestic media outlet reported citing the UPB document. Both exports and imports recorded growth rates of 10.7 per cent and 11.1 per cent YoY respectively in September, extending the trend of double-digit growth for the seventh consecutive month this year.

The latest purchasing managers’ index (PMI) for Vietnam sharply declined to 47.3, marking the first time it has recorded a fall after five months of expansion in a row. This trend raises concerns about the country’s production capacity and supply chains, as well as the recovery of the agricultural and services sectors.

UOB experts feel these disruptions are likely to be more pronounced in the October-November period, and as a result, growth in Q4 this year is projected to slow to 5.2 per cent YoY, down from 7.4 per cent in Q3.

Fibre2Fashion News Desk (DS)