Vietnam GDP growth slows to 5.8% in 2023, accelerates to 6.9% in 2024: IMF

Vietnam’s GDP growth might slow down to 5.8% in 2023 and then rebound to 6.9% in 2024, among the highest figures in Asia, according to the International Monetary Fund (IMF).

In its April edition of the “World Economic Outlook,” the IMF added that Vietnam’s GDP growth can reach 6.7% in 2028.

Among emerging and developing Asian nations, only India and the Philippines top Vietnam in GDP growth in 2023 with 5.9% and 6%, respectively. For 2024, Vietnam’s figure is the highest one, followed by India with 6.3%, the Philippines with 5.8%.

About inflation, IMF put Vietnam’s consumer price index (CPI) projection at 5% in 2023 and then slow to 4.3% in 2024, after a low result of 3.2% last year.

Vietnam posted economic growth of 3.32% in the first quarter of 2023 compared to a year earlier, the General Statistics Office reported. The first quarter’s performance comes amid current global economic headwinds, with the U.S. and European banking sectors facing a crisis of confidence, and significantly lower than the 5.92% growth rate in Q4/2022.

In mid-March, the World Bank said that Vietnam’s economic expansion might ease to 6.3% in 2023 from a robust 8% last year, reflecting domestic and external headwinds. The figure is lower than the target of 6.5% set by the National Assembly, the highest legislative body in Vietnam.

United Overseas Bank (UOB) is keeping its 2023 economic growth forecast for Vietnam at 6.6%, the Singapore bank said in March.

FDI becomes more political

The IMF stressed that global foreign direct investment (FDI) is becoming more responsive to geopolitical factors, indicating that “FDI is increasing concentrated among countries that share similar geopolitical views.”

In regard to outward FDI from the US, some relative “winners,” such as Canada and South Korea, are “politically closer” to the US, in comparison with relative “losers,” namely Vietnam and China.

According to data of the Ministry of Planning and Investment, registered FDI capital in Vietnam declined 38.8% to $5.45 billion in the first quarter of 2023, while disbursed capital dropped 2.2% to $4.3 billion.

FDI from the US reached $54.63 million in the period, equivalent to 39.7% of that a year ago. Overall, the US is the 11th biggest foreign investor in Vietnam with 1,239 valid projects and the total registered capital of $11.43 billion.