Standard Chartered Predicts 7% Growth Rate for Vietnam in the Second Half of the Year
Standard Chartered Bank has expressed an optimistic outlook for Vietnam’s economy, projecting a robust rebound in the second half of the year with a year-on-year growth rate of 7%. This positive trend is attributed to sustained improvements in trade data since the beginning of 2023, indicating a clearer recovery in the latter part of the year. The bank highlights Vietnam’s economic openness and stability as crucial factors supporting the country’s promising medium-term outlook. Furthermore, the continued recovery of tourist arrivals is expected to contribute to strengthening the services balance.
Despite a trade surplus in the second quarter, exports experienced a decline compared to the previous year. However, Vietnam’s overall trade surplus for the first half of the year exceeded 2022 levels, largely driven by reduced imports due to lower energy prices. In light of weaker-than-expected data and a more challenging global outlook, Standard Chartered has revised down its GDP growth forecast for Vietnam in 2023 from 6.5% to 5.4%.
Regarding monetary policy, Standard Chartered predicts that the State Bank of Vietnam (SBV) will further reduce the benchmark refinancing rate by 50 basis points to 4.0% in the third quarter, aligning it with the rate observed during the pandemic. The bank anticipates that the SBV will maintain this rate until the end of 2025. In addition to rate cuts, the SBV has implemented measures such as loan repayment delays and rate waivers to support businesses. However, concerns remain regarding developers’ ability to meet financial obligations, including interest and principal payments on bonds, as well as securing funding for working capital and projects.
Standard Chartered’s insights underscore the need for cautious monitoring of economic developments and the implementation of measures to support industries. By navigating these challenges and leveraging its economic strengths, Vietnam can position itself for a strong recovery and sustained growth.