Vietnam's economic growth may slow in H2, but outlook remains positive: UOB

According to UOB experts, Vietnam's real GDP grew by 6.93% year-on-year in Q2, continuing the momentum from the 5.87% increase in Q1 and previous quarters. Overall, the economy expanded by 6.42% in the first half, significantly outpacing the 3.84% growth logged in the same period of 2023.

The manufacturing and services sectors continued to drive most business activities, while foreign trade remained robust in Q2. The increase in semiconductor sales since mid-2023 indicates that this momentum may persist for another 1-2 quarters.

The UOB maintained its growth forecast for Vietnam at 6.0% for 2024, compared to the government's target range of 6.0-6.5%.

Notably, the analysts said most foreign investors have a positive long-term outlook for Vietnam. This is evidenced by the 13.1% year-on-year increase to $15.2 billion in registered foreign direct investment (FDI) in the first six months.

Regarding interest and exchange rates, the UOB's report issued on Tuesday noted that the recent depreciation of the VND against a strengthening USD and rising inflation may prompt the State Bank of Vietnam to be cautious with any changes to policy rates. Considering the potential slowdown in growth in the latter half, the UOB projected that the central bank would maintain the refinancing rate at the current level of 4.5%.