Vietnam’s economic growth can reach 5% in 2023, 6.3% in 2024: HSBC

Vietnam can reach economic growth of 5% in 2023 and 6.3% in 2024, said Frederic Neumann, HSBC's chief Asia economist and co-head of Global Research Asia, at a Monday event held by the bank.

Vietnam’s 2024 growth is projected above the global average of 2.3% and regional peers including China (4.6%), Malaysia (4.5%), and the Philippines (5.2%), Neumann highlighted.

He attributed the projection to export activities driving the economy as the global economy recovers in the post-pandemic era. Another supporting factor is rising domestic consumption thanks to the recovery of the labor market and the growing middle class.

Regarding challenges, the economist said inflation is not a major risk, but the key one is that the global economy may underperform, affecting Vietnam’s export-driven economy.

Party General Secretary Nguyen Phu Trong in his closing remarks at a week-long Party Central Committee gathering on Sunday said Vietnam’s economic growth may surpass 5% this year, below the mandated 6.5%, as the country has seen a drop in exports amid global weaker demand.

“Although lower than the target of 6.5%, it is quite high in comparison with many countries in the region and the world,” the Party chief noted.

Meanwhile, other institutions’ predictions are close to HSBC’s 5% prediction for 2023. Singapore-based UOB bank maintained its full-year growth forecasts for Vietnam at 5.2% for 2023 and 6% for 2024.

The International Monetary Fund (IMF) kept its 2023 GDP growth forecast for Vietnam unchanged from its April projection at 4.7%. The World Bank revised down its Vietnam GDP growth forecast to 4.7% in 2023.

The ASEAN+3 Macroeconomic Research Office (AMRO) said Vietnam’s GDP growth could reach 4.7% in 2023. The Asian Development Bank (ADB) revised down Vietnam’s economic growth forecast to 5.8% in 2023.

For 2024, HSBC’s 6.3% Vietnam projection is higher than those given by other institutions. UOB forecast a growth of 6%, the IMF 5.8%, the World Bank 5.5%, AMRO 6%, and the ADB 6%.