The Asian Development Bank (ADB) has adjusted Vietnam’s GDP growth projection for the current year, lowering it from 5.8% to 5.2% due to subdued external demand.
Notably, Vietnam’s economic expansion in the initial nine months slowed more than anticipated, registering a 4.2% growth, which is half the rate observed during the same period last year.
The diminished growth can be attributed to the cumulative effects of declining external demand, ineffective budget execution, a sluggish job market recovery, and subdued domestic consumption, as outlined in a recent report by the ADB.
On the supply side, economic growth faces hindrances from reduced output in both industry and services sectors.
In response to this unexpected slowdown, the ADB has revised its official growth forecast for Vietnam in 2023 to 5.2%, down from the initial projection of 5.8% in September. However, the forecast for 2024 remains unchanged at 6.0%.
ADB, which initially projected Vietnam’s growth at 6.5% earlier this year, has consistently adjusted its forecasts downward.
Vietnam’s inflation reached 4.3% in the first 11 months, driven by trade recovery and increased prices of imported fuel and electricity tariffs. Despite the country’s inflation target of 4.0-4.5%, the ADB predicts inflation to be 3.8% for the current year and 4.0% for the next.
Prime Minister Pham Minh Chinh, in October, anticipated Vietnam’s GDP to be slightly over 5% this year, a notable decline from the 8% recorded last year. The government remains committed to prioritizing growth, maintaining macroeconomic stability, controlling inflation, and ensuring the overall balance of the economy.
