StanChart lifts Vietnam’s 2024 GDP growth forecast to 6.8%

Standard Chartered Bank has revised up its forecast for Vietnam’s 2024 GDP growth to 6.8% from the previous 6.0%, reflecting the stronger-than-expected Q3 expansion.

For Q4, growth is expected to moderate to 6.9%, the British multinational bank said in its recent macro-economic updates about Vietnam.

According to government data, Vietnam’s GDP grew by a higher-than-expected 7.4% in Q3 despite the devastating typhoon Yagi, resulting in January-September growth of 6.82%.

The bank retains its 2025 forecast at 6.7%, with projected growth of 7.5% year-on-year in H1 and 6.1% year-on-year in H2.

According to Standard Chartered’s economists, Vietnam’s economic growth momentum has been relatively strong, with improvement across multiple sectors, including imports and exports, retail sales, real estate, tourism, construction, and manufacturing.

Trade recovery, increased business activity, and foreign investment will be sources of growth in 2025 and beyond, they added.

Tim Leelahaphan, economist for Thailand and Vietnam, Standard Chartered Bank, said: “While we remain cautious on Vietnam’s economy near-term, we also acknowledge the economy’s ability to perform better than market expectations.

“The government’s push for stronger economic growth may help maintain low interest rates in the near future, and Fed moves will also be key to the State Bank of Vietnam’s monetary policy decisions. We now expect a 50-basis point rate hike next year, rather than in Q4/2024 as previously anticipated,” added the economist.

Standard Chartered forecasts Fed rate cuts, which should lead to a softer USD bias over the next few quarters, will result in a USD/VND exchange rate at 24,500 by the end of 2024 and 24,300 by mid-2025.

Standard Chartered has been the latest international institution to raise its growth forecast for Vietnam, after HSBC, Singapore-headquartered United Overseas Bank (UOB), the International Monetary Fund (IMF), and market intelligence company S&P Global.