ADB maintains Vietnam GDP forecast at 6.5%

The Asian Development Bank has maintainted its prediction for Vietnam's economic expansion this year at 6.5%, while revising down its forecast for developing Asia and the Pacific to 4.6% from 5.2% in April.

Vietnam's growth will be driven by continued trade expansion, the faster-than-expected recovery of manufacturing, domestic travel and the disbursement of public investment, the bank said in a release Thursday.

"Surging global commodity prices, especially global oil prices, would increase inflationary pressure. However, the abundance of domestic food supply would help ease inflation in 2022," it noted.

The bank's inflation forecast for Vietnam is unchanged at 3.8% for 2022 and 4.0% for 2023. The GDP growth projection for 2023 is 6.7%.

On July 12, Standard Chartered Bank put its GDP growth forecast for Vietnam this year at 6.7% and 7.0% for 2023. The country’s inflation is predicted at 4.2% and 5.5% respectively.

HSBC revised up in early July its Vietnam GDP prediction for 2022 from 6.6% to 6.9%, while IMF put its estimation at 6%.

The WB and the IMF expect Vietnam’s 2022 inflation to be contained at a maximum of 4%, which is the State Bank of Vietnam's target.

Vietnam's economic expansion in the first half of the year was 6.42%, higher than the 5.1-5.7% target, official data shows. It aimed to achieve GDP growth of 7% this year, higher than the previously-set target of 6-6.5%, Minister of Planning and Investment Nguyen Chi Dung told a government meeting on July 4.

The country's consumer price index in the first six months rose 2.44% on average against the same period last year.

ADB said it lowered its economic growth prediction for developing Asia and the Pacific to 4.6% this year due to slower expansion in China, more aggressive monetary tightening in advanced economies, and fallout from the continued Russian invasion of Ukraine.

Inflation in developing Asia and the Pacific is predicted to accelerate to 4.2% this year, compared with a previous forecast of 3.7%. However, inflation pressure in the region as a whole is still lower than elsewhere in the world.

The outlook for Southeast Asia was raised to 5% this year from 4.9% amid increased domestic demand due to more relaxed Covid-19 restrictions. For 2023, ADB lowered its economic growth projection for the region to 5.2% from 5.3%, while raising the inflation forecast to 3.5% from 3.1%.