ADB retains Vietnam's GDP growth forecast at 6% for 2024

The Asian Development Bank (ADB) has retained Vietnam's economic growth forecast this year at 6%, the bank said in its April 2024 edition of the Asian Development Outlook (ADO).

For 2024, Vietnam's figure is above developing Asia's average of 4.9% and developing Asia (excluding China)'s average of 5%.

In Southeast Asia, Vietnam's figure is the highest, on par with the Philippines. In Asia, Vietnam's projected 6% growth is only below India with 7%, Bangladesh 6.1%, Tajikistan 6.5%, and Turkmenistan 6.5%.

The bank also anticipated Vietnam's GDP growth at 6.2% for 2025, again the highest in Southeast Asia and on the same level as the Philippines. India has the highest figure in Asia with 7.2%.

Regarding inflation, the ADB predicted Vietnam's figure at 4% in 2024 and 4% in 2025, higher than Southeast Asia's average of 3.2% and 3% for the two years.

Commenting on Vietnam's macroeconomy, the ADB said: "Slowing global demand and high international interest rates hampered Vietnam’s growth in 2023. A timely switch to an accommodative monetary policy to support growth was among the key measures taken for the economy to move back on the path to recovery.

"Sizeable public investment this year should further restore growth. Inflation is expected to edge up in tandem with the economic revival. A key policy challenge is enhancing public investment effectiveness for short-term stimulus and as a foundation for longer-term development."

The bank noted that a relatively broad based growth restoration in export-led manufacturing services and stable agriculture would make the gradual recovery possible.

"Positive inflows of FDI and remittances, a sustained trade surplus, continued fiscal support and a substantial public investment program would also stimulate growth. However downside risks from global geopolitical uncertainties and exposed domestic structural fragilities could impede growth," it commented.

"A gradual revival of export-led manufacturing would support FDI. Registered FDI increased by 13.4% and disbursed FDI went up 7.1% in the first quarter of 2024, compared with the same period last year. Accelerated public investment and improved business conditions can spur private investment 2024," the ADB added.

Earlier, the ASEAN+3 Macroeconomic Research Office (AMRO) said Vietnam’s GDP growth could reach 6% in 2024 and 6.5% in 2025, higher than the 5.1% posted in 2023. Vietnam’s 6% figure for 2024 is the third highest in the region, only behind the Philippines with 6.3% and Cambodia with 6.2%.

In a report released last week, HSBC said that given a weaker-than-expected Q1 GDP growth, it had kept its Vietnam economic expansion forecast unchanged at 6% for 2024.

Earlier last week, UOB bank predicted that Vietnam would grow 6% this year, compared to the official 6-6.5% growth target.