Vietnam’s 2024 GDP forecast to grow 5.8%: Maybank Securities

Vietnam’s economy is expected to expand 5.8% in 2024 from 5.05% last year, driven by exports and domestic consumption, projected Maybank Securities Limited (MSVN).

In its April market strategy report, the subsidiary of Malaysia-headquartered Maybank – among the top five banks in Southeast Asia said it expected a robust revival in the second half of 2024 and attributed the first-quarter GDP growth rate of 5.7% to significant demand overseas and recovering local demand.

In Q1, the industry and construction sector jumped 5.3% year-on-year, and the service area rose 6.1%. Meanwhile, export hit $93.06 billion, up 17%.

Besides, banking credit inched up 0.26% as of March 25, improving from the negative 0.6% observed in late January and the negative 0.72% in late February.

Pressure on the Vietnamese dong (VND), fueled by the disparity between domestic and global gold prices, is expected to ease once local authorities identify regulatory issues and close legal loopholes to stabilize the market, MSVN noted, citing a proposal to abolish the monopoly on gold bar production.

Meanwhile, the U.S. Federal Reserve's (Fed) maintenance of high interest rates has greatly impacted Vietnam’s foreign exchange market over the past two years, the report said.

The State Bank of Vietnam, the country's central bank, will continue to use jawboning and T-bills tools to increase VND interbank interest rates. It is expected to accept higher foreign exchange rates, likely around 4-5%, compared to March 29’s 2.3% level, while awaiting the Fed's first rate cut, probably in June.

Besides, the path for an upgrade of Vietnam’s stock market to an emerging status by the FTSE progressed in March when the State Securities Commission sought public output for a draft circular regarding pre-funding requirement removal.

The upward trend of Vietnam’s benchmark VN-Index has slowed, nearing 1,290-1,330 points, while margin lending at some securities firms is approaching the 2022 peak, MSVN noted, expecting the market to experience corrections or a sideways movement in April.

The Asian Development Bank (ADB) has retained Vietnam's economic growth forecast this year at 6%, above developing Asia's average of 4.9% and developing Asia (excluding China)'s average of 5%.

Earlier, the ASEAN+3 Macroeconomic Research Office (AMRO) said Vietnam’s GDP growth could reach 6% in 2024 and 6.5% in 2025. Vietnam’s 6% figure for 2024 is the third highest in the region, only behind the Philippines with 6.3% and Cambodia with 6.2%.

In a report released last week, HSBC said that given a weaker-than-expected Q1 GDP growth, it had kept its Vietnam economic expansion forecast unchanged at 6% for 2024. Singapore-based UOB bank predicted that Vietnam would grow 6% this year, compared to the official 6-6.5% growth target.