ADB forecasts Vietnam to grow 5.8% in 2023

The Asian Development Bank (ADB) has just released its July 2023 Asian Development Outlook (ADO) report, lowering its growth forecast for Vietnam in 2023 from 6.5% to 5.8%, and from 6.8% to 6.2% in 2024.

According to the ADB, weak external demand continues to put pressure on industrial production and manufacturing, while domestic conditions are expected to improve. Vietnam's inflation is projected to slow to 4% in 2023 and 2024.

Previously, several organizations also lowered their economic growth forecasts for Vietnam this year after the General Statistics Office announced that GDP growth in the second quarter and the first six months of 2023 was low, at 4.14% and 3.72% respectively.

The Asian Development Bank (ADB) has lowered its growth forecast for Vietnam.

Several domestic and international organizations believe that Vietnam's target of 6.5% growth this year is a major challenge.

The BIDV Training and Research Institute forecasts GDP growth for the whole year of 2023 (base scenario) at approximately 5-5.5% (lower than the 5.5-6% forecast in March).

According to the ADB, the Asia- Pacific region's economy is projected to grow by 4.8% in 2023, driven by strong domestic demand that continues to support the region's recovery. Inflation is expected to continue to decline, approaching pre-pandemic levels as fuel and food prices fall.

Inflation in developing Asia is projected to reach 3.6% this year, lower than the 4.2% forecast in April 2023. Meanwhile, the inflation forecast for 2024 has been raised to 3.4% from the previous estimate of 3.3%.

The Asian Development Bank (ADB) forecasts that the Chinese economy will grow by 5% this year, unchanged from its April forecast, amid strong domestic demand in the services sector. The ADB believes that China's reopening is driving growth in the region.

However, demand for electronics and other manufactured goods from developing Asia is slowing down, due to tight monetary policies leading to sluggish economic activity in major developed economies.

According to ADB Chief Economist Albert Park, Asia and the Pacific continues its steady recovery from the pandemic. Domestic demand and service sector activity are driving growth, while many economies are also benefiting from a strong rebound in the tourism sector.

However, according to this expert, industrial activity and exports remain weak, leading to a weaker outlook for global growth and demand next year.

The ADB maintained its growth forecasts for most subregions in Asia and the Pacific. Exceptions included Southeast Asia, where the outlook was lowered to 4.6% this year and 4.9% next year, compared with estimates of 4.7% and 5.0% respectively in April.

Forecasts for the Caucasus and Central Asia subregion have been slightly revised downwards, from 4.4% to 4.3% for 2023 and from 4.6% to 4.4% for 2024.

Low GDP growth, sharply falling interest rates: What are the targets for the economy and the stock market? The stock market experienced significant volatility as profit-taking pressure surged. However, there are signs that capital is not withdrawing, and foreign investors are actively buying. The real estate market is showing signs of warming up along with the stabilization of the macroeconomic environment.

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