Vietnam's economy in 2024 is promising, with growth of 6% or more

The Vietnamese economy continued its recovery in 2023 with many outstanding highlights. Entering 2024, many international financial institutions have given optimistic assessments and predictions about Vietnam's GDP growth rate, all forecasting an increase of 6% or more.

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Experts at Standard Chartered Bank assess that Vietnam's economic outlook in the medium term remains promising.

In its recently published global research report on Vietnam titled “Vietnam – Stronger but Not Easier,” Standard Chartered Bank Vietnam forecasts Vietnam’s GDP growth to reach 6.7% in 2024 (projected at 6.2% in the first half and 6.9% in the second half).

Tim Leelahaphan, an economist specializing in Thailand and Vietnam at Standard Chartered Bank, stated that Vietnam's medium-term economic outlook remains promising. To maintain its growth rate and competitiveness, Vietnam needs to develop its infrastructure and reduce carbon emissions.

According to Standard Chartered Bank's economic experts, retail sales and industrial production remain strong despite recent adjustments. Imports and exports are beginning to recover, although e-commerce has yet to show clear signs of recovery. With concerns about inflation returning, inflation is projected to rise from 3.3% in 2023 to 5.5% in 2024.

Similarly, in its assessment of Vietnam's growth rate in 2024, HSBC Bank believes that Vietnam is recovering on schedule and is likely to regain a 6% growth trend in 2024.

As FDI inflows continue to boost production capacity, Vietnam's manufacturing sector will show signs of recovery, creating opportunities for exports. While the impact of applying a minimum corporate tax of 15% needs to be monitored, these effects remain manageable.

HSBC experts expect inflation to remain at a moderate level in 2024, projected at 3.4%, significantly lower than the new inflation target of 4-4.5%.

Despite the widespread downward trend in inflation in Vietnam, price pressures have not completely disappeared. The risk of increased inflation due to energy and food remains, especially given Vietnam's sensitivity to these items due to their significant weight in the inflation calculation basket.

VinaCapital also believes that 2024 will be a stronger year for the Vietnamese economy, driven by the recovery of the manufacturing sector and improved consumer sentiment. The lower interest rates in 2023 will also support the recovery of the real estate market, similar to what supported the stock market previously.

Commenting on the Vietnamese economy in 2024, Michael Kokalari, Director of Macroeconomic Analysis and Market Research at VinaCapital, analyzed that Vietnam's GDP growth is expected to reach 6-6.5% in 2024, driven by a recovery in the manufacturing sector and improvements in consumer sentiment and spending.

Regarding consumer demand, VinaCapital's economic experts expect manufacturing activity to recover well this year. Consumer demand will not increase sharply in 2024 because the wave of foreign tourists to Vietnam boosted consumption last year and is unlikely to be repeated this year.

Vietnamese consumer spending (excluding tourists) also began to recover from late 2023 due to improvements in the labor market and because Vietnam's "frozen" real estate market started to move positively thanks to lower interest rates. Low interest rates also supported the stock market in 2023, but VinaCapital expects interest rates to be much more stable in 2024 and stock market investors to refocus their attention.

(according to VNA)

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