The Asian Development Bank (ADB) announced at a conference in Hanoi on Thursday that Vietnam’s economic growth is projected at 6.0% for 2024 and 6.2% for 2025, despite ongoing external uncertainties.
During the conference, Nguyen Ba Hung, ADB Chief Economist in Vietnam, highlighted that slowing global demand and high international interest rates affected Vietnam’s growth in 2023. However, the swift transition to pro-growth monetary policies and substantial public investments are key measures to sustain growth recovery.
It is anticipated that a relatively broad-based recovery in export-led manufacturing and services, along with stable performance in the agriculture sector, will support Vietnam’s recovery momentum. Positive trends such as foreign direct investment (FDI) inflows, remittances, trade surplus, domestic consumption recovery, and continued fiscal stimulus through substantial public investments are expected to bolster growth in 2024.
ADB Country Director for Vietnam, Shantanu Chakraborty, expressed confidence in Vietnam’s economic growth prospects for this year and the next, despite global challenges. However, he cautioned that global geopolitical uncertainties and domestic structural weaknesses could influence the outlook. Hence, policy measures in 2024 should combine short-term growth support with long-term structural reforms to foster sustainable growth.
Softened global demand, driven by slow economic recovery and delayed interest rate normalization in the U.S. and other advanced economies, coupled with ongoing geopolitical tensions, may hinder Vietnam’s export-led growth recovery in 2024.
To accelerate growth, stronger measures are needed to address domestic structural weaknesses, including heavy reliance on FDI-led manufacturing exports, weak linkages between manufacturing export industries and the broader economy, underdeveloped capital markets, excessive dependence on bank credit, and complex regulatory barriers to business.
Public investment remains a vital driver of Vietnam’s economic growth, underscoring the importance of effective implementation. While the government has implemented various measures to expedite public investment and improve execution efficiency, more systematic approaches are necessary to enhance legal and regulatory frameworks and reduce constraints on efficient delivery.