Fitch Ratings forecasts Vietnam economy to grow 6.3% in 2024

Vietnam’s economy is predicted to grow 6.3% in 2024 and 7% in 2025 thanks to support from domestic fiscal and monetary policies, following a slowdown in 2023, Fitch Ratings has said.

Vietnam's GDP growth slowed to 4.3% in the first three quarters of 2023 amid weak external demand and lingering headwinds in the domestic property sector.

“However, domestic fiscal and monetary policies have pivoted to provide growing support to the economy,” said the rating agency in a recent note.

“The economy's medium-term fundamentals remain favorable and sustained economic expansion make for positive business prospects in the banking sector. This underpins the banking sector operating environment score of ‘bb-/positive’,” it added.

The Vietnamese government recently said the local economy might grow 5% plus this year, much weaker than the 6-6.5% pace projected a year ago.

A spate of international institutions have issued more positive notes for Vietnam’s growth next year given stronger global demand, robust foreign investment, and domestic resilience.

The IMF put Vietnam’s growth at 5.8% in 2024 and 6.9% in 2025. The ADB revised down the country’s 2024 growth forecast to 6% while the WB’s projection was cut to 5.5% for next year.

HSBC last month forecast the country’s GDP expansion at 6.3% in 2024 while Standard Chartered Bank maintained a robust 2024 growth forecast of 6.7%. Singapore-based bank UOB kept its 2024 projection unchanged at 6%.

The Vietnamese parliament on Thursday set a growth target of 6-6.5% for next year.