HSBC predicts 6.3% growth in GDP for the upcoming year

According to HSBC, the recovery of exports and domestic spending will be the two main drivers for Vietnam’s GDP to reach 6.3% in 2024. At a recent seminar on business prospects in Hanoi, Frederic Neumann, HSBC’s chief economist for Asian economics research, stated that the bank predicts a 5% growth for Vietnam’s economy this year and 6.3% growth next year. Neumann emphasized that as demand returns, exports will increase in 2024, contributing to Vietnam’s economic strength.

However, the country’s export turnovers have declined by over 8% year-on-year, reaching nearly $260 billion in the first nine months, as reported by the General Statistics Office. Nevertheless, the situation is expected to improve next year as the global economic growth structure changes. Neumann mentioned that consumers may resume shopping, considering their limited purchases over the past 1-1.5 years. This indicates an increase in demand in Vietnam’s main export markets, thereby boosting export turnovers.

The second driving force for Vietnam’s economy in the coming year is domestic spending, including consumption and government purchases, which is forecasted to rise. The total retail sales of goods and consumer service revenue have increased by 9.7% in the first nine months, albeit only half of the same period last year. Additionally, experts predict that the financial, service, and real estate sectors, as well as infrastructure development, will recover in 2024.

However, Neumann warned that exports still pose risks due to Vietnam’s high economic openness, as the country heavily relies on exports. If major export markets such as the U.S., Europe, and China recover less than expected, it could lead to reduced imports. Consequently, weaker global demand would impact Vietnam’s export growth pillars.