ADB lowers Vietnam growth forecast to 5.8%

By Van Minh
Wed, July 19, 2023 | 5:00 pm GMT+7

The Asian Development Bank (ADB) on Wednesday revised its Vietnam growth forecast down to 5.8% for 2023 and 6.5% for 2024, from 6.5% and 6.8% in April, respectively.

The developing economies in Asia that will grow the fastest in 2023 are India at 6.4%, the Philippines at 6%, and Vietnam at 5.8%, the bank said.

A Maersk container vessel at the port cluster of Cai Mep-Thi Vai in Ba Ria-Vung Tau province, southern Vietnam. Photo courtesy of Ba Ria-Vung Tau newspaper.

A Maersk container vessel at the port cluster of Cai Mep-Thi Vai in Ba Ria-Vung Tau province, southern Vietnam. Photo courtesy of Ba Ria-Vung Tau newspaper.

Vietnam’s GDP growth slowed from 6.5% year-on-year in the first half of 2022 to 3.7% in this year’s first half as external demand weakened and growth in manufacturing output braked to only 0.4%, the lowest half-year figure in a dozen years.

In its “Asian Development Outlook” report released on Wednesday, ADB cited this as reason for its forecast revision.

The manufacturing index PMI for the Southeast Asian country has languished below 50 since March 2023 as weaker trade growth closed many businesses, notably in export-driven manufacturing. Industrial production was hit as well by recent power outages in the north and trouble in the real estate sector, the report said.

A credit crunch in response to the corporate bond market and bank exposure to elevated property risk squeezed construction in Vietnam. Meanwhile, recovery in domestic travel boosted consumption, with retail sales up by 11% year-on-year in the first half of 2023.

“In Vietnam, the inflation forecast is trimmed to 4% in 2023 and 2024 on declining global energy prices and stable food supply,” ADB noted.

Growth in Southeast Asia is now expected at 4.6% this year and 4.9% next year, down from 4.7% and 5% previously, due mainly to weaker global demand for exports, it said.

The bank maintained its growth outlook for developing economies in “Developing Asia” in 2023 at 4.8%, driven by “robust domestic demand” and “moderating inflation.”

Developing Asia consists of 46 economies in the Asia-Pacific and excludes Japan, Australia and New Zealand.

“Asia and the Pacific continue to recover from the pandemic at a steady pace,” ADB’s chief economist Albert Park said in the report.

“Domestic demand and services activity are driving growth, while many economies are also benefiting from a strong recovery in tourism,” he added.

Inflation in “Developing Asia” as a whole is expected to stand at 3.6% this year, up from the 4.2% forecast in its previous report in April, while the inflation outlook for 2024 is raised to 3.4% from its earlier estimate of 3.3%.

The reopening of the Chinese economy, which is projected to grow this year at 5%, is boosting the region’s growth despite a slowdown in the demand for Developing Asia’s exports of electronics and other manufactured goods due to monetary tightening to contain inflation, ADB said.

However, the bank marginally lowered the Developing Asia growth forecast for 2024 from 4.8% to 4.7%, as “industrial activity and exports remain weak, and the outlook for global growth and demand next year has worsened.”

Last month, the World Bank cut its Vietnam GDP growth forecast this year to 6% in its June edition of “Global Economic Prospects,” but the figure remained among the highest in Asia, on par with the Philippines. In January, the bank estimated Vietnam’s 2023 GDP growth at 6.3%.

Comments (0)
  • Read More
Vietnam needs large, specialized logistics centers to compete better: official

Vietnam needs large, specialized logistics centers to compete better: official

Vietnam needs large-scale, specialized logistics centers that will enable greater competitiveness of local economies and enterprises, says Tran Thanh Hai, deputy head of the Ministry of Industry and Trade's agency of foreign trade.

Economy - Sun, November 3, 2024 | 11:00 am GMT+7

Vietnam manufacturing sector sees 35% increase in Q3 job orders: Adecco

Vietnam manufacturing sector sees 35% increase in Q3 job orders: Adecco

Vietnam’s manufacturing and sourcing sectors saw a substantial 35% year-on-year increase and a 52% quarter-on-quarter increase in Q3/2024 job orders, global workforce solutions provider Adecco said in a reseach report released Thursday.

Economy - Sun, November 3, 2024 | 9:00 am GMT+7

Construction majors to continue capitalizing on public investment projects

Construction majors to continue capitalizing on public investment projects

Vietnamese construction giants are expected to continue capitalizing on public investment projects for the remainder of this year after delivering strong performances in the third quarter, analysts say.

Companies - Sun, November 3, 2024 | 8:00 am GMT+7

Former Government Office chairman receives $7,900 bribe from property project

Former Government Office chairman receives $7,900 bribe from property project

Mai Tien Dung, former Minister-Government Office Chairman, received a bribe worth VND200 million ($7,900) from Nguyen Cao Tri, owner of the Dai Ninh eco-resort and urban area project in Lam Dong province.

Society - Sat, November 2, 2024 | 9:13 pm GMT+7

Thai food giant CP enters public-private partnership to promote food system transformation

Thai food giant CP enters public-private partnership to promote food system transformation

Thai-invested C.P. Vietnam Livestock JSC and the Partnership for Sustainable Agriculture Vietnam (PSAV) signed a memorandum of understanding Friday on working together to advance sustainable agriculture in the country.

Companies - Sat, November 2, 2024 | 7:16 pm GMT+7

Central Vietnam province Quang Ngai to begin work on new VSIP industrial park next year

Central Vietnam province Quang Ngai to begin work on new VSIP industrial park next year

Vietnam’s central province of Quang Ngai will work with the investor to have construction of VSIP II Quang Ngai, a facility based on the Vietnam-Singapore Industrial Park (VSIP) model, begin in August 2025.

Industrial real estate - Sat, November 2, 2024 | 3:47 pm GMT+7

Vietnam likely to grow 6.5% in 2024-2025: VinaCapital

Vietnam likely to grow 6.5% in 2024-2025: VinaCapital

VinaCapital, among the biggest foreign-run asset managers in Vietnam, has forecast the country’s economy to achieve 6.5% growth in both 2024 and 2025, with the composition of the expansion to change to more domestically driven factors next year.

Economy - Sat, November 2, 2024 | 2:00 pm GMT+7

Major Vietnamese developer Novaland appoints new CEO

Major Vietnamese developer Novaland appoints new CEO

Duong Van Bac, who joined Novaland as chief financial officer in August 2023, has been appointed general director, starting Friday.

Companies - Sat, November 2, 2024 | 10:24 am GMT+7

Vietnamese conglomerate Bamboo Capital posts 36-fold profit growth in Q3

Vietnamese conglomerate Bamboo Capital posts 36-fold profit growth in Q3

Ho Chi Minh City-based Bamboo Capital Group recorded an after-tax profit of VND331.2 billion ($13.1 million) in the third quarter of 2024, an astounding 36-fold expansion year-on-year.

Southeast Asia - Sat, November 2, 2024 | 9:41 am GMT+7

ThaiBev to bag $54 mln from Sabeco’s upcoming dividend payout

ThaiBev to bag $54 mln from Sabeco’s upcoming dividend payout

Vietnam Beverage, wholly owned by Thai Beverage (ThaiBev) will rake in VND1,374 billion ($54.26 million) worth of dividend from Ho Chi Minh City-based top brewer Sabeco.

Companies - Sat, November 2, 2024 | 9:13 am GMT+7

Steel heavyweight Hoa Phat pours over $2 bln into central Vietnam complex

Steel heavyweight Hoa Phat pours over $2 bln into central Vietnam complex

Leading Vietnamese steelmaker Hoa Phat had invested more than VND52.5 trillion ($2.08 billion) in its Dung Quat Iron and Steel Integrated Complex (Dung Quat 2) in the central province of Quang Ngai as of Q3/2024.

Industries - Sat, November 2, 2024 | 8:00 am GMT+7

Vietnam becomes Australia’s fastest-growing inbound market

Vietnam becomes Australia’s fastest-growing inbound market

The number of Vietnamese tourists to Australia has grown significantly after the Covid-19 pandemic, with nearly 178,000 reported in the 12 months to August 2024, according to a Friday press release by the Australian Minister for Trade and Tourism’s Office.

Southeast Asia - Fri, November 1, 2024 | 10:02 pm GMT+7

Study finds shift in Thai consumers’ spending patterns

Study finds shift in Thai consumers’ spending patterns

Consumers in Thailand are shifting their spending focus to experiences and investments, according to the latest ASEAN Consumer Sentiment Study (ACSS) by United Overseas Bank (UOB).

Southeast Asia - Fri, November 1, 2024 | 10:00 pm GMT+7

Energy security, digitalization key to Indonesia's economic growth

Energy security, digitalization key to Indonesia's economic growth

The Indonesian government is prioritizing long-term economic growth through energy security, digitalization, and natural resource industrialization, according to Deputy Minister of Finance Thomas Djiwandono.

Southeast Asia - Fri, November 1, 2024 | 9:58 pm GMT+7

Vietnam PM's Middle East tour creates breakthroughs in economic, trade, investment cooperation: FM

Vietnam PM's Middle East tour creates breakthroughs in economic, trade, investment cooperation: FM

Prime Minister Pham Minh Chinh’s freshly ended six-day trip to the UAE, Saudi Arabia and Qatar has produced important outcomes, demonstrating the growing relations between Vietnam and the three Middle-East countries, Deputy Prime Minister and Foreign Minister Bui Thanh Son told the Vietnam News Agency.

Politics - Fri, November 1, 2024 | 9:25 pm GMT+7

Vietnam, Qatar look to tap potential for energy, oil & gas collaboration

Vietnam, Qatar look to tap potential for energy, oil & gas collaboration

Vietnam and Qatar have recognized the significant potential for further collaboration in multiple sectors such as energy, oil and gas, especially LNG, agriculture, Halal industry, and banking.

Politics - Fri, November 1, 2024 | 9:02 pm GMT+7