AMRO cuts Vietnam GDP growth forecast to 4.4%

The ASEAN+3 Macroeconomic Research Office (AMRO) has revised down Vietnam’s GDP growth forecast to 4.4% in 2023 in its July update for regional economic outlook from 6.8% in April.

The figure for Vietnam is below the ASEAN’s average of 4.5%. The highest figure among ASEAN nations is the Philippines with 6.2%, Cambodia with 5.7%, Indonesia with 5%, Laos with 4.8%.

The change was mainly due to the first-quarter result, as Vietnam is highly exposed to manufacturing exports and manufacturing exports are still very weak across the region, said AMRO chief economist Hoe Ee Khor.

However, the AMRO expected Vietnam’s economy to bounce back with a 7.6% growth in 2024, the highest one in the region and the “Plus 3” areas of mainland China, Hong Kong, Japan, and South Korea. Other countries with high growth in 2024 are the Philippines with 6.5%, Cambodia with 6.2%, Indonesia with 5.3%, China with 5.2%, and Malaysia with 5.2%.

Regarding inflation, the AMRO projected Vietnam’s consumer price index (CPI) to reach 2.9% in 2023 and 2.7% in 2024, lower than the April edition’s figures of 3% and 2.5%, respectively. Vietnam’s 2023 inflation forecast is among the lowest, only higher than Thailand with 1.9%, Brunei with 0.9%, Cambodia with 2.8%, China with 1.2%, and equalling Japan, also with 2.9%.

Vietnam experienced a strong post-pandemic economic recovery last year. Its GDP rose by a historically high 8%, driven by strong domestic and external demand. Average inflation was contained at 3.2%, although price pressures picked up steadily during the year.

The economy expanded by 4.14% in the second quarter of this year from a year ago, amid slowing global demand for imports, the General Statistics Office (GSO) said. The first quarter saw a slow growth rate of 3.31%. Overall, in the first half of 2023, the economy expanded by 3.72% year-on-year.

Foreign agencies have different projections of Vietnam’s economic growth. The IMF estimates Vietnam’s 2023 growth at 4.7%, aided by a second-half recovery led by a rebound in exports and expansionary domestic policies.

Meanwhile, the WB puts Vietnam's 2023 growth prediction at 6%, among the highest in Asia and on par with the Philippines.

An HSBC Vietnam update this month trimmed the country's 2023 growth forecast to 5% from the previous 5.2%, taking into account a protracted and deeper-than-expected trade downturn.

S&P Global Ratings has estimated Vietnam’s 2023 economic growth at 6%, citing the nation’s resilience, making it the fastest-expanding economy in the Asia-Pacific region.