UOB forecasts economic growth in the final quarter of the year at 5.2%

On December 2, UOB Bank forecast that Vietnam's economic growth in the fourth quarter will reach 5.2% compared to the same period last year and continued to maintain its growth forecast for 2024 at 6.4%.

Singaporean banks believe that with Vietnam's double-digit export growth rate for 10 consecutive months in 2024, exports will grow by 14.9% year-on-year by October 2024. This will bring the trade surplus in 10 months to 22.3 billion USD, the second consecutive year that Vietnam has a large trade surplus, with a surplus of more than 28 billion USD in 2023.

In addition, the growth momentum of foreign direct investment (FDI) continued to expand, with registered FDI inflows reaching US$27.3 billion in the first 10 months of 2024, up 2% year-on-year. Disbursed FDI inflows as of October reached US$19.6 billion and are on track to become the third consecutive year of record FDI inflows.

According to UOB, the latest published data shows that Vietnam's growth trajectory remains on track - Photo: Dinh Hai

Meanwhile, retail sales have remained steady for much of 2024 so far, with a 7.1% increase in October and an average year-to-date increase of 8.5% year-on-year and compared with a 10.4% increase for all of 2023.

This was partly supported by a 41% increase in tourist arrivals, to 14.1 million visitors year-to-date through October. This was due to increases from top tourist sources including South Korea, China, the Taiwan region, the United States and Japan.

However, compared to the pre-COVID-19 boom in 2019, tourist arrival data continues to decline and may take another one to two years to return to pre-pandemic levels.

For these reasons, UOB continues to maintain its forecast for Vietnam’s full-year economic growth in 2024 at 6.4%. At the same time, UOB forecasts that Vietnam’s economy will grow by 6.6% in 2025.

The National Assembly recently set an economic growth target of 6.5-7.0% for 2024 and 6.5-7.0% for 2025, including "efforts" to reach 7.0-7.5%.

UOB economists also note global trade in 2025 based on calculations between Trump 1.0 and 2.0 policies. A negative global trade scenario in 2025 would boost the strength of the US dollar. UOB recommends that the State Bank of Vietnam will have to pay attention to depreciation pressure on the VND and the Singapore bank expects the refinancing rate to be maintained at the current level of 4.50%.

“Despite its solid fundamentals, VND remains constrained by external factors such as the USD recovering as the market revalues the scenario of fewer rate cuts by the US Federal Reserve (Fed) during Trump 2.0,” UOB said.

Source: https://thoibaonganhang.vn/uob-du-bao-tang-truong-kinh-te-quy-cuoi-nam-o-muc-52-158355.html