HSBC raises Vietnam's 2024 GDP growth forecast to 6.5% from 6% earlier

26 Jul '24

2 min read

HSBC raises Vietnam's 2024 GDP growth forecast to 6.5% from 6% earlier

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HSBC has raised Vietnam's GDP growth forecast for this year to 6.5 per cent from 6 per cent earlier and maintained its growth projection for next year at 6.5 per cent.
After seeing a slightly disappointing Q1 2024, growth accelerated to 6.9 per cent YoY in Q2.
Inflation, however, seems to be an imminent concern and remained elevated on a YoY basis in June.

HSBC recently raised Vietnam’s gross domestic product (GDP) growth forecast for this year to 6.5 per cent from 6 per cent earlier and maintained its growth projection for next year at 6.5 per cent.

In a report titled ‘Vietnam at a glance: Bring it all back’, HSBC said after recording a slightly disappointing first quarter (Q1), GDP growth accelerated to 6.9 per cent year on year (YoY) in Q2, well above the market expectations of 6 per cent.

Expanding by 10 per cent YoY, the manufacturing sector offered the biggest upside surprise. This is also reflected in the strong growth seen in Q2 exports of 15 per cent YoY.

Inflation, however, seems to be an imminent concern and remained elevated on a YoY basis in June, the report said.

Though an uneven recovery in the trade sector was seen, exports of textiles and footwear—typically more exposed to disruptions in the Red Sea—also bounced back to see double-digit growth in the second quarter.

While near-term trade has started to take off, long-term FDI prospects remain a bright spot, domestic media outlets reported citing the HSBC document.

Despite moderating from its peak in 2017, fresh foreign direct investment (FDI) continues to pour into the country, with, manufacturing accounting for the lion’s share. Newly registered FDI was worth $10 billion in the first half this year.

Investment from ASEAN peers continues to be strong, particularly from Singapore.

Fibre2Fashion News Desk (DS)

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