Vietnam economy ready to bounce back: Citi Vietnam

By Duc Minh   February 3, 2024 | 04:00 pm PT
Vietnam economy ready to bounce back: Citi Vietnam
Ramachandran A.S, country head of Citi Vietnam. Photo courtesy of Citi Vietnam
Vietnam seems to have overcome its biggest economic challenges last year and is now ready to recover, according to Ramachandran A.S., country head of lender Citi Vietnam.

Citi’s latest forecast put Vietnam’s GDP growth at 5-6%, against the country’s goal of 6-6.5%. Inflation was pegged at 3.5-4% against the targets of 4-4.5%.

The biggest shocks to the economy are now behind Vietnam, and the country is ready to recover this year, Ramachandran told a forum Friday.

Citi Vietnam economist Helmi Arman said that that the current supply chain shift would support Vietnam's exports and industrial production in 2024, and exports were also expected to recover after falling about 5% last year.

External demand may continue to weaken because of slow global GDP growth, but Vietnam will continue to benefit from the process of supply chain restructuring, and its exports capacities are ready to expand, according to Arman.

Exports of garments, footwear and electronics will continue to be the main drivers, predicted Citi.

Foreign direct investment inflow would likely be abundant this year as Vietnam is expected to emerge as a new global manufacturing hub, according to the lender.

Citi anticipated that the property sector would not experience a strong recovery this year. But there are signs of increasing demand and the social housing segment will potentially post strong recovery.

Demand for credit is also rising, but Vietnam still needs to access larger international funds for its key energy and infrastructure projects as the country needs $135 billion over the next seven years to produce and transmit electricity.

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