Research agency AMRO revises up Vietnam’s economic growth forecast to 6.3%

Vietnam’s GDP growth could reach 6.3% in 2024 and then accelerate to 6.5% in 2025, according to the ASEAN+3 Macroeconomic Research Office (AMRO).

In the July edition of its ASEAN+3 Regional Economic Outlook (AREO), AMRO revised up Vietnam’s 2024 forecast from 6% in the April edition and maintained the figure for its 2025 forecast.

The “AMRO+3” includes 10 ASEAN nations and the “+3” economies of China and Hong Kong, Japan, and South Korea.

Vietnam’s 6.3% is the highest figure for 2024 in the report, followed by the Philippines with 6.1% and Cambodia with 5.6%.

On average, AMRO kept its 2024 and 2025 growth forecasts for the ASEAN+3 region broadly unchanged at 4.4% and 4.3%, respectively.

Favorable export prospects should boost the region’s growth momentum, alongside firm domestic demand and the continued recovery in tourism, AMRO added. “Brighter global demand prospects are reflected in the upward growth revisions for Vietnam and South Korea,” it highlighted.

Regarding inflation, the report anticipates Vietnam’s figures at 3.8% in 2024 and 3.3% in 2025, higher than the 3.6% and 2.7%, respectively, forecast in the April edition.

Reviewing the region’s economic performance, AMRO highlighted that travel and tourism are approaching pre-pandemic levels. So far this year, four economies, namely Cambodia, Japan, South Korea, and Vietnam, saw foreign tourist arrivals above their respective pre-pandemic averages.

Uncertainty around U.S. interest rates has weighed on ASEAN+3 financial markets, AMRO stressed. While most regional currencies continue to weaken against the U.S. dollar, some central banks, including the State Bank of Vietnam, have stepped into the foreign exchange markets to stem depreciation pressures.

In July, Prime Minister Pham Minh Chinh said Vietnam will strive to achieve GDP growth of 6.5-7% in Q3/2024. The 7% goal is higher than the National Assembly’s target of 6-6.5% for the whole year.

Also in July, Singapore’s leading bank UOB kept its GDP growth projection for Vietnam unchanged at 6% for this year, although the Q2 performance exceeded the bank’s and market expectations.

In a June 20 release, S&P Global said following Vietnam’s relatively lackluster GDP growth of 5.05% in 2023, it expects healthier global demand conditions to support an acceleration to 5.8% in 2024.

Vietnam’s economic growth could reach 6% in 2024 and 6.2% in 2025, following a 6.4% expansion in the first half of 2024, the Asian Development Bank (ADB) said in the July edition of its Asian Development Outlook (ADO).