Vietnam partly drags down regional economic growth to 4.2% in 2024: AMRO researchers

The Singapore-based ASEAN+3 Macroeconomic Research Office (AMRO) has cut its growth forecast for the ASEAN+3 region to 4.2% in 2024 from 4.4% in July, primarily due to downward adjustments for China and Vietnam.

In its October edition of the ASEAN+3 Regional Economic Outlook (AREO) Update, the AMRO said the ASEAN is expected to reach an economic growth of 4.7% in 2024, while the Plus-3 economies (mainland China, Hong Kong, Japan, and South Korea) are projected to grow 4.1%.

For Vietnam, the AMRO revised down Vietnam’s GDP growth this year to 6.2%, versus 6.3% in the July edition of the report. However, Vietnam can bounce back stronger in 2025 with a 6.6% growth, higher than 6.5% in the July report. The AMRO did not specify reasons for its worse forecast about Vietnam.

Vietnam was hard hit by typhoon Yagi in early September, with economic damage amounting to some $3.31 billion, according to the latest estimate released by the agriculture ministry.

Regarding mainland China, the AMRO cut down its GDP growth projection to 5%, versus 5.3% in the previous forecast, lowering the Plus-3 region's GDP growth to 4.1% from 4.4%.

For the whole region’s lower forecast, the AMRO said early August saw significant market volatility, triggered by a confluence of factors including weaker-than-expected U.S. labor data and the unwinding of carry trades following the Bank of Japan's monetary policy adjustment.

“This led to a sharp but short-lived market adjustment, with regional stock indices plunging from mid-July peaks,” the AMRO noted.

International organizations have released different forecasts for Vietnam's economic growth this year.

Singapore-based United Overseas Bank (UOB) revised down its GDP growth forecast for Vietnam by 0.1 percentage point to 5.9% this year due to the damage caused by super typhoon Yagi.

HSBC has maintained its Vietnam GDP growth projection at 6.5% for both 2024 and 2025, despite temporary economic disruptions from super typhoon Yagi, the most powerful to hit the country in over three decades.

The International Monetary Fund (IMF) said in its latest note that Vietnam’s economic growth is projected to recover to 6.1% in 2024, up from 5.8% in April forecast.

S&P Global, a U.S.-based market intelligence company, has revised up Vietnam’s GDP growth this year to 6.2%, in its latest “Economic Outlook Emerging Markets Q4 2024” report.