Vietnam likely to emerge strongly from mounting challenges in 2024: HSBC

By Anh Minh
Fri, January 12, 2024 | 2:42 pm GMT+7

Despite headwinds, Vietnam ended 2023 relatively optimistic that 2024 is likely to be the year that Vietnam emerges strongly from mounting challenges, HSBC said in a recent note.

Hanoi's skyline. Photo courtesy of hotels.com

Hanoi's skyline. Photo courtesy of hotels.com

Growth normalization

The manufacturing sector, one of the country’s key growth engines, saw a notable improvement in the second half of last year from extreme sluggishness in H1/2023. It has shown positive signs of recovery, led by the electronics sector.

A gradual recovery in Vietnam’s external sector, driven by electronics shipments, brings good news for its current account, helping to defend the Vietnamese dong to some extent. After suffering from two consecutive years of current account deficits, Vietnam is finally on course to return to a current account surplus, which is expected to be sizeable.

Thanks to resilient remittances, rising tourism receipts, and improving trade dynamics in H2, the current account, measured on a four-quarter rolling basis, returned almost to 5% of GDP as of Q3/2023, on par with its historical highs.

Apart from an improving manufacturing sector, Vietnam’s robust services continue to provide much-needed support to the economy, evident in tourism-related sectors, including retail sales, transport, and accommodation.

On the other hand, not all services sectors have enjoyed the same benefits as tourism. Despite a small improvement, real estate services remain weak. Growth in private consumption more than halved in 2023 from its pre-pandemic trend of 7%.

On track for recovery

The country’s GDP growth rose to 6.7% year-on-year in Q4/2023, lifting its yearly growth rate to 5.05%. This was in line with HSBC economists’ forecast of 5%, which they had maintained for more than six months, despite a downward revision to 4.6% among consensus.

They reckon that Vietnam is on track for recovery, likely returning to its trend growth of 6% in 2024.

As FDI inflows continue to add production capacity, Vietnam’s manufacturing sector is experiencing the green shoots of a rebound, bringing opportunities for its exports.

They point out several downside risks. First, the export recovery is not broad-based, almost entirely led by a brighter tech cycle. An earlier-than-expected release of Samsung’s flagship smartphone also helps. “While it is optimistic to see a nascent turn in the trade cycle, we remain cautious on the magnitude of such a rebound,” they say.

Second, inflation is also worth watching. Fortunately, Vietnam’s inflation was under control in 2023, averaging 3.3%, which was in line with HSBC’s expectations and below its inflation ceiling of 4.5%.

The HSBC economists expect inflation to remain benign in 2024, with a forecast of 3.4%, well below the new inflation target of 4-4.5%. However, they recommend paying attention to upside risks to inflation such as energy and food, the rise of healthcare costs.

While maintaining an eye on upside risks to prices, the State Bank of Vietnam is expected to keep its policy rate steady at 4.5% thorough 2024, they say.

Comments (0)
  • Read More
Vietnam plans to spend over $2 bln on US agri imports

Vietnam plans to spend over $2 bln on US agri imports

Vietnam’s Ministry of Agriculture and Environment is expected to sign MoUs to purchase over $2 billion worth of U.S. agricultural, forestry, and fishery products.

Economy - Tue, June 3, 2025 | 10:01 pm GMT+7

New flight route to help Danang attract more wealthy tourists from Middle East

New flight route to help Danang attract more wealthy tourists from Middle East

The new Dubai-Danang flight route has been launched, paving the way for an influx of high-spending travelers from the Middle East and Europe to the central Vietnam city, one of the country's top tourist attractions.

Companies - Tue, June 3, 2025 | 9:13 pm GMT+7

Food giant C.P. Vietnam’s 'diseased' pigs improperly quarantine-stamped: authorities

Food giant C.P. Vietnam’s 'diseased' pigs improperly quarantine-stamped: authorities

The widely circulated images of diseased pigs from C.P. Vietnam, a subsidiary of Thailand’s food giant Charoen Pokphand Foods Public Company Limited (CPF), date back to 2022, but the pigs were improperly stamped, Vietnamese authorities stated on Tuesday.

Companies - Tue, June 3, 2025 | 5:36 pm GMT+7

Son Hai Group proposes expanding 263km stretch of Vietnam's North-South Expressway

Son Hai Group proposes expanding 263km stretch of Vietnam's North-South Expressway

Vietnam’s Son Hai Group is seeking Prime Minister Pham Minh Chinh's approval to invest in the expansion of a 263-kilometer stretch of the eastern section of the North-South Expressway.

Infrastructure - Tue, June 3, 2025 | 3:53 pm GMT+7

FedEx establishes direct serve in Vietnam on surging demand

FedEx establishes direct serve in Vietnam on surging demand

FedEx Express Corporation, one of the world’s largest express transportation companies, has transitioned to a direct-serve presence in Vietnam amid the Southeast Asian country’s growing international shipping demand.

Industries - Tue, June 3, 2025 | 2:55 pm GMT+7

Vietnam’s steel giant Hoa Phat to deliver thousands of containers to domestic shipping lines  

Vietnam’s steel giant Hoa Phat to deliver thousands of containers to domestic shipping lines  

Vietnam’s largest steelmaker, Hoa Phat Group, will supply thousands of containers to VIMC Container Transport JSC (VIMC Lines) and Vinafco Shipping JSC under recently signed contracts.

Companies - Tue, June 3, 2025 | 12:16 pm GMT+7

Shinhan Bank receives 'Fastest growing SME bank Vietnam 2025' award

Shinhan Bank receives 'Fastest growing SME bank Vietnam 2025' award

South Korea’s Shinhan Bank Vietnam Limited has been named the “Fastest Growing SME Bank Vietnam 2025” by World Economic Magazine (UK).

Companies - Tue, June 3, 2025 | 10:19 am GMT+7

Vietnam’s ‘shrimp king' Minh Phu expects to return to profit in 2025

Vietnam’s ‘shrimp king' Minh Phu expects to return to profit in 2025

Minh Phu Seafood Corporation (UPCoM: MPC), Vietnam’s leading shrimp exporter, expects net profit to reach VND997 billion ($38.03 million) this year, reversing the loss in 2024.

Companies - Tue, June 3, 2025 | 8:38 am GMT+7

CMC Corporation breaks ground on $300 mln technology hub in Hanoi

CMC Corporation breaks ground on $300 mln technology hub in Hanoi

Vietnam's leading technology firm CMC Corporation on Monday broke ground on its $300 million Hanoi CMC Creative Space (CCS Hanoi) project.

Industries - Mon, June 2, 2025 | 11:19 pm GMT+7

Thailand’s industrial output up after 9-month decline

Thailand’s industrial output up after 9-month decline

Thailand’s industrial output has turned positive for the first time in nine months, with the automotive sector rebounding after a 21-month slump, said Thai Deputy Finance Minister Paopoom Rojanasakul.

Southeast Asia - Mon, June 2, 2025 | 10:48 pm GMT+7

Singapore, France to expand cooperation in civil nuclear energy, defence technology, AI research

Singapore, France to expand cooperation in civil nuclear energy, defence technology, AI research

Singapore and France have upgraded their Strategic Partnership signed in 2012 to a Comprehensive Strategic Partnership (CSP), marking Singapore's first CSP with a European country.

Southeast Asia - Mon, June 2, 2025 | 10:47 pm GMT+7

Masan MEATLife stock jumps on continued profit momentum

Masan MEATLife stock jumps on continued profit momentum

The ticker of Masan MEATLife (MML), a subsidiary of Vietnamese consumer retail giant Masan Group, jumped by 8.71% to VND31,200 ($1.2) per share on Monday, after it reported profit for the third consecutive quarter in Q1/2025.

Companies - Mon, June 2, 2025 | 10:34 pm GMT+7

Vietnam's VSIP Binh Dinh industrial park seeks to become 'golden destination' for Thai firms

Vietnam's VSIP Binh Dinh industrial park seeks to become 'golden destination' for Thai firms

The Becamex VSIP Binh Dinh service-urban-industrial complex in the central province of Binh Dinh is emerging as a promising destination for Thai enterprises, said its developer Becamex Binh Dinh JSC.

Industrial real estate - Mon, June 2, 2025 | 10:24 pm GMT+7

Termination of feed-in-tariff mechanism a major bottleneck in Vietnam’s electricity transition: expert

Termination of feed-in-tariff mechanism a major bottleneck in Vietnam’s electricity transition: expert

A major bottleneck in Vietnam’s electricity transition has been the termination of the feed-in-tariff (FIT) mechanism in 2021, with no suitable replacement mechanism in place, according to the director of Hanoi-based Institute of Energy Technology.

Economy - Mon, June 2, 2025 | 4:56 pm GMT+7

Vietnam Vaccine JSC launches high-quality healthcare shop chain

Vietnam Vaccine JSC launches high-quality healthcare shop chain

Vietnam Vaccine JSC (VNVC), well known for its vacciation services, on Saturday launched its VNVC Shop, a chain offering safe, high-quality healthcare products from globally recognized brands.

Companies - Mon, June 2, 2025 | 4:05 pm GMT+7

Vietnam heavyweight PV Gas plans $3 bln investment over next 5 years

Vietnam heavyweight PV Gas plans $3 bln investment over next 5 years

PV Gas, a subsidiary of state-owned giant Petrovietnam, plans to make "strong investment" over the next five years in areas such as infrastructure and import-distribution of LNG.

Energy - Mon, June 2, 2025 | 2:01 pm GMT+7