Think tank projects Vietnam’s 2024 GDP growth at 6.84-7%

In an optimistic scenario, Vietnam’s GDP is forecast to grow by 7.4% in Q4/2024, leading to a full-year expansion of 7%, according to the Hanoi-based Vietnam Institute for Economic and Policy Research.

In a less optimistic scenario, the country’s growth may come in at less than 7% in Q4, resulting in a full-year growth rate of 6.84%, the think tank (VEPR) said in a macro report launched in Hanoi on Tuesday.

In both scenarios, the whole-year projection is higher than the 6-6.5% target set by the parliament.

At a cabinet meeting last week, Minister of Planning and Investment Nguyen Chi Dung said the government aimed to grow its economy by 7.6-8% in Q4. Such Q4 growth would enable the whole-year reading to reach 7% or more.

The ministry’s renewed projection came after government data showed that the economy grew by a surprisingly high 6.82% in the first nine months, despite the devastation left by typhoon Yagi, which swept through the northern region last month.

The higher-than-expected Q4 performance prompted HSBC, UOB, and the World Bank to raise their 2024 projections for Vietnam to 7%, 6.4%, and 6.1%, respectively.

The report pointed out downside risks for the Vietnamese economy in the coming time. They include weaker than expected consumer demand and manufacturing in the U.S., a drop in Europe’s growth, China’s slowdown, uncertainty in the U.S.’s trade policy after the presidential election, among others.

Clearer geopolitical fragmentation and escalating conflicts among major powers and in the Middle East may lead to supply chain disruptions, causing higher transportation and insurance costs and eventually leading to imported inflation in Vietnam, according to the report.

At home, business barriers and cumbersome administrative procedures may hurt business sentiment, it added.