The Asian Development Bank (ADB) forecasts Vietnam's economic growth to reach 6% in 2024, higher than previous figures, but still warns of some risks.
At a press conference this morning (April 11), the Asian Development Bank (ADB) forecast that Vietnam's economy will grow by 6% in 2024 and 6.2% in 2025.
According to ADB, weak global demand and high international interest rates have hampered Vietnam's growth in 2023. However, a timely shift to a growth-supportive monetary policy is one of the key measures to help the economy get back on track. Large-scale public investment this year will continue to restore growth. Inflation is expected to pick up along with the economic recovery. The key policy challenge is to improve the efficiency of public investment to stimulate growth in the short term and create a foundation for long-term development.
A relatively comprehensive recovery in export processing industries, services and stable performance of the agricultural sector are expected to support Vietnam's recovery momentum.
Positive foreign direct investment (FDI) and remittance inflows, sustained trade surplus, recovering domestic consumption, and continued fiscal stimulus with a substantial public investment program are seen as key to boosting growth in 2024.
Mr. Shantanu Chakraborty, ADB Country Director for Viet Nam, shared: Viet Nam’s economy is expected to grow at a solid pace this year and next, despite a challenging global environment. However, global geopolitical uncertainties and structural constraints in the domestic economy could affect this outlook.
ADB recommends that to boost growth, Vietnam needs stronger measures to address domestic structural weaknesses, including the heavy dependence on FDI enterprises on the export processing industry, weak linkages between the export processing industry and the rest of the economy, immature capital markets, over-reliance on bank credit, and complex legal barriers for businesses.
Public investment remains a driver of Vietnam’s economic growth, and effective implementation of public investment is critical to driving growth. While the Government has taken a number of measures to accelerate public investment and improve implementation, more systematic measures are needed to improve legal and regulatory processes to reduce barriers to effective project implementation.
ADB Country Director for Vietnam Shantanu Chakraborty noted that weak global demand due to slow economic recovery and delayed interest rate normalization in the United States and other advanced economies, along with ongoing geopolitical tensions, could hinder a full recovery of Vietnam's export-led growth in 2024.
To boost growth, ADB recommends that stronger measures are needed to address domestic structural weaknesses such as the heavy dependence of FDI enterprises on the export processing industry, weak linkages between the export processing industry and the rest of the economy, immature capital markets, over-reliance on bank credit, and complex legal barriers for businesses.
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