Economic growth set to hit 10 pct in Q3: VinaCapital

By Dat Nguyen   July 19, 2022 | 11:44 pm PT
Economic growth set to hit 10 pct in Q3: VinaCapital
Containers are seen at Cat Lai Terminal in Ho Chi Minh City in December 2021. Photo by VnExpress/Thanh Nguyen
Vietnam’s GDP growth is set to exceed 10 percent in Q3 due to the low base in the same period last year caused by Covid-19 restrictions, investment fund VinaCapital forecasts.

"We believe that a 10 percent year-on-year GDP print for Q3 would be a major catalyst for investors to pour money into Vietnam’s stock market, with the only caveat to the very bright outlook for Vietnam’s GDP growth being the on-going slowdown in U.S. GDP growth," said VinaCapital Chief Analyst Michael Kokalari in a note.

This slowdown in the U.S. economy, Vietnam’s biggest export market, is weighing on demand for "made in Vietnam" products like TVs, furniture, and smartphones, and export growth to this market slowed down from 50 percent in the first half last year to 23 percent this year.

Inflation in Vietnam is still modest at just 3.4 percent year-on-year at the end of June, and this stems in part from the fact that Vietnam produces more than enough food to feed its citizens.

Inflation is likely to remain well within the range targeted by the State Bank of Vietnam at 4 percent.

Some listed companies have seen earnings rise in their post-pandemic recovery.

The surge in domestic consumption propelled the earnings growth of consumer discretionary companies listed on the stock exchange, including electronics retailer Digiworld (DGW) and jewelry retailer Phu Nhuan Jewelry (PNJ), which both achieved 50-60 percent increases in their first-six-month earnings.

The resumption of tourism has helped double Airports Corporation of Vietnam (ACV)’s earnings, while FPT Retail saw earnings surge five times.

VinaCapital has also lifted its growth forecast for Vietnam from 6.5 percent to 7.5 percent.

Last year, growth was 2.6 percent.

go to top