AsemconnectVietnam - ADB, World Bank and Standard Chartered had their forecast for Vietnam’s economic growth rate in 2024.

The Asian Development Bank’s forecast
The Asian Development Bank forecasted that Vietnam's economic growth in 2024 to remain at 6%.
However, ADB believed that Vietnam's growth rate is quite good compared to many countries in the region. The bank said that a weaker-than-expected recovery in external demand continues to hamper industrial and services growth, slowing Vietnam's recovery in employment and domestic consumption but prudent and proactive monetary policy will help control inflation. The inflation in Vietnam is forecast at 3.8% in 2023 and 4% in 2024.
The World Bank’s forecast
The WB hopes that the demand for Vietnamese exports from the rest of the world will recover in 2024, he said, recommending Vietnam to leverage its internal strength and boost the productivity growth of its domestic economy to transform the challenges provided by the global economic slowdown into an opportunity to further strengthen its economic growth model.
Authorities can play an important role to support the economy through fiscal policy, particularly by accelerating the implementation of transformational public investment and infrastructure projects which are going to strengthen economic growth both in the short term and in the longer term, he said.
According to the expert, Vietnamese people are the greatest source of the country’s internal strength, so he suggested Vietnam continue promoting the private sector development and boosting productivity by upskilling the labour force and physical capital development through public investments in transport and energy infrastructure that can further strengthen the competitiveness of the private sector.
According to Vietnam’s Macro and Poverty Outlook released by the WB at the end of the last year, Vietnam’s economic growth is expected to reach 5.5 % in 2024 and 6.0 % in 2025.
In its Vietnam Macro Monitoring report announced at the end of 2023, the bank stressed that the efforts to restore confidence and promote a healthy development of the real estate markets will be key to supporting economic stability in the short term and economic growth in the long term.
Standard Chartered forecast
Standard Chartered Bank expected Vietnam to have a robust GDP growth of 6.7% in 2024 (6.2% and 6.9% in the first half and second half of the year, respectively).
The forecast is highlighted in the bank’s recently published global research report on Vietnam titled “Vietnam – stronger but not easier”.
“Vietnam continues to offer a promising medium-term outlook. To maintain rapid growth and competitiveness, Vietnam needs to upgrade infrastructure and prepare to lower carbon emissions,” said Tim Leelahaphan, Economist for Thailand and Vietnam, Standard Chartered.
According to Standard Chartered’s economist, retail sales and industrial production have stayed robust despite the recent moderation. Exports and imports are starting to recover, though electronics-related trade remains tentative. The FDI recovery remains lacklustre; a stronger recovery in FDI flow would require faster GDP growth. Headwinds to global trade pose a key risk.
Standard Chartered Bank forecasts monetary loosening has likely ended, given Vietnam’s economic recovery starting to gain momentum. The bank expects rates to stay on hold despite a possibility of another rate cut. Refinancing rate is expected to stay on hold at 4.5 % until end-Q3-2024, before a 50bps hike in Q4.
“We expect the central bank to strike a delicate policy balance between supporting the economy recovery and combating rising inflation and currency weakness. Inflation and a wide income-spending gap may result in a search-for-yield behaviour and financial instability risks,” Tim said.
He believes the Vietnamese dong continues to face headwinds, with a mild VND appreciation, targeting 24,000 by end-2024. Forex reserves are forecasted to be rebuilt when US dollar strength abates.
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Source: VITIC/Vietnamplus.vn