Vietnam's economy is developing positively.

According to Bloomberg, a report by the Development Bank of Singapore (DBS Bank) states that the Vietnamese economy is recovering well.

Illustrative image. (Source: VGP)

Foreign direct investment (FDI) will continue to increase as Vietnam remains attractive to investors in the coming years, with companies diversifying and mitigating supply chain risks by expanding manufacturing operations to this promising economy.

Competitive labor costs, a wide network of trade agreements, and a favorable business environment are key advantages for Southeast Asian economies.

The State Bank of Vietnam is likely to maintain a stable benchmark interest rate in 2024 as it grapples with concerns about economic growth and inflation. It was one of the first central banks in Asia to lower borrowing costs in 2023.

The latest Bloomberg survey shows that the refinancing rate (currently at 4.5%) is expected to remain unchanged until 2025 amid recovering GDP growth driven by strong export growth. This rate was cut three times between April and June 2022, from a peak of 6% to 4.5%.

In a previous survey, economists predicted that the State Bank of Vietnam would cut interest rates by another 50 basis points in the first quarter of 2024. Analysts also raised their overall inflation forecast for 2024, now expecting prices to rise by 3.6% in the first quarter of 2024 and 4.05% in the second quarter of 2024 (up from 2.9% and 3.3% in the first and second quarters of 2023, respectively).

Analysts predict that inflation for the whole of 2024 will be 3.5% (compared to 3% in 2023), before falling to 3.2% in 2025. The inflation rate in 2024 will still be lower than the government 's target of 4-4.5%.

According to the survey, the Vietnamese economy is projected to grow by 6.3% in the first quarter of 2024 and 6.5% in the second quarter of 2024. Annual GDP growth is forecast at 6% in 2024 and 6.4% in 2025.

Source: https://baoquocte.vn/kinh-te-viet-nam-phat-trien-tich-cuc-256978.html