Vietnam's GDP to grow by 6.7% in 2022, 7% in 2023: Standard Chartered

The forecast is highlighted in the Vietnam section of the bank’s recently published global research report titled ‘Global Focus—Economic Outlook Q3-2022: Near the tipping point’.

“Vietnam’s economic recovery has shown signs of broadening; macroeconomic indicators continued to recover in June. The recovery may accelerate markedly in second quarter of the year, particularly as tourism reopens after a two-year closure. That said, rising global oil prices may have negative consequences for the economy,” said Tim Leelahaphan, economist for Thailand and Vietnam, Standard Chartered Bank.

Price pressures, particularly for food and fuel, may increase later in 2022 and in 2023. This could pose a risk to the nascent recovery in domestic consumption. Elevated inflation could also result in search-for-yield behaviour or increase financial instability risk, the document noted.

Standard Chartered Bank expects the State Bank of Vietnam (SBV) to keep the policy rate on hold at 4 per cent in 2022 and policy normalisation to take place in the fourth quarter of 2023, with a 50 basis point (bps) hike to 4.5 per cent.

The marcro-economic study also points out three factors could adversely affect the country’s economic outlook, including new COVID-19 variants, the lifting of US tariffs on imports from China, and a global recession. Pandemic concerns persist, despite Vietnam shift to a ‘living with COVID-19’ policy, according to Vietnamese media reports.

On the trade front, the White House has said it is reviewing tariffs on some US imports from China to ease inflation; this could slow the pace of investment relocation from China to Vietnam, reducing foreign direct investment (FDI) inflows into the country or even resulting in outflows.

Fibre2Fashion News Desk (DS)