Standard Chartered has just revised its growth forecast for Vietnam down from 5.4% to 5% compared to one month ago.
In its economic update report published on October 24, Standard Chartered stated that the revised forecast reflects lower-than-expected year-to-date economic performance and a gloomy global economic outlook.
According to Standard Chartered, to achieve a 5% growth rate for the whole year, Vietnam needs to grow by 7% in the fourth quarter. This is considered a challenging target.
"While macroeconomic indicators have temporarily improved, trade still shows no clear signs of a recovery in production," the bank said.
Nevertheless, Standard Chartered also notes that domestic recovery signals continue and are likely to strengthen further thanks to retail sales. The construction and accommodation sectors have maintained strong growth year-to-date, while manufacturing has begun to expand. External outlooks are improving with a growing current account surplus.
Reporting to the National Assembly on October 23, Prime Minister Pham Minh Chinh stated that the Vietnamese economy is being affected by unfavorable external factors and long-standing internal limitations. The competitiveness and resilience of the economy remain limited. Accordingly, GDP growth this year is projected to be over 5%, lower than the National Assembly's target of 6.5%. Inflation is expected to be around 3.5-4%.
Tim Leelahaphan, Thailand and Vietnam economist at Standard Chartered Bank, said that in the medium term, Vietnam's economic outlook remains promising thanks to its openness and stability. However, Vietnam needs to quickly restore GDP growth and develop infrastructure to attract FDI.
He also noted that the Vietnamese real estate market may need further liquidity support because measures taken so far have only helped alleviate short-term debt repayment pressure. "Low interest rates, newly approved projects, and improved buyer sentiment could support the market," he said.
Standard Chartered also revised its inflation forecast upwards to 3.4% this year, compared to 2.8% previously. The inflation rate for the fourth quarter is projected at 4.3% (previously 2.7%) and is likely to rise further next year due to increased costs for education , housing, food, and transportation.
The consequences of rising inflation can lead to increased profit-seeking and a higher risk of financial instability.
Vnexpress.net
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