Standard Chartered lowers Vietnam's growth forecast

By Duc Minh   October 24, 2023 | 07:16 pm PT
Standard Chartered lowers Vietnam's growth forecast
Farmers harvest lychee in the northern province of Bac Giang in June 2021. Photo by VnExpress/Ngoc Thanh
Standard Chartered has amended its economic growth forecast for Vietnam to 5% from the earlier 5.4%.

The British lender said Tuesday it made the change based on the facts that growth so far this year has been lower than expected and the global outlook is gloomy.

To achieve the 5% rate, the Vietnamese economy needs to grow at 7% in the fourth quarter, a challenging task, it said.

Macroeconomic indicators have temporarily improved, but production and trade have not yet seen clear signs of recovery, it said.

But it pointed out that more signs of recovery are appearing and the trend is likely to continue due to higher retail sales.

Prime Minister Pham Minh Chinh told lawmakers in the National Assembly Monday that the economy is being affected by adverse external factors and long persisting internal limitations.

The economy’s competitiveness and resilience remain limited, he said.

This year’s GDP is expected to grow by over 5%, lower than the target of 6.5% set by the NA. Inflation is expected to be contained at 3.5-4%, Chinh said.

Tim Leelahaphan, Standard Chartered’s economist for Thailand and Vietnam, said Vietnam’s economic prospects are still promising in the medium term thanks to openness and stability, but it needs to soon boost GDP growth and develop infrastructure to attract FDI.

The property market may need additional liquidity support because the measures so far have only helped reduce short-term debt repayment pressure.

"Low interest rates, newly approved projects and improving buyer sentiment could support the market."

Standard Chartered has also amended its inflation forecast for the year to 3.4% from 2.8%.

It now expects a 4.3% price rise in the fourth quarter, up from its earlier forecast of 2.7%, due to increased costs of education, housing, food, and transportation.

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