WB revises down Vietnam’s 2023 GDP growth forecast to 6%

The World Bank has cut its Vietnam’s GDP growth forecast this year to 6% in its June edition of “Global Economic Prospects,” but the figure remains among the highest in Asia, on par with the Philippines.

In January, the bank estimated Vietnam’s 2023 GDP growth at 6.3%.

Reviewing 2022 and early 2023, the WB said growth in Vietnam and some East Asia and Pacific countries had slowed around the turn of the year following a boost from earlier post-pandemic reopening. While consumption growth remained firm, goods trade decelerated before stabilizing, reflecting weak global demand and tepid activity in China, the bank noted.

This year, lackluster growth in global goods trade, a key engine in some East Asia and Pacific nations, is expected to weigh on Malaysia and Vietnam, according to the WB.

The WB’s latest projections indicate that the world economy will remain frail and at risk of a deeper downturn this year and next year. Global economic growth will slow from 3.1% in 2022 to 2.1% in 2023, and then rebound to 2.4% in 2024, it forecast. For emerging market and developing economies, except for China, growth is set to slow to 2.9% in 2023 from 4.1% in 2022.

According to the WB, the average growth of East Asia and the Pacific could reach 5.5% this year, with major economies such as India rising 6.3%, China 5.6%, Indonesia 4.9%, Malaysia 4.3%, and Thailand 3.9%.

Vietnam’s economic growth could accelerate to 6.2% and 6.5% in 2024 and 2025, respectively, to be among the top in Asia. East Asia and the Pacific’s figures are expected to fall to 4.6% and 4.5% in 2024 and 2025, respectively, the WB added.

Vietnam posted economic growth of 3.32% in the first quarter of 2023 compared to a year earlier, the General Statistics Office reported in March. 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 reported in the last quarter of 2022.

Standard Chartered Bank in May lowered Vietnam’s 2023 GDP growth forecast to 6.5% from the previous 7.2% and got more cautious on the external front.

In the same month, HSBC said it expected Vietnam’s economy to expand 5.2% this year. The forecast is lower than the International Monetary Fund's rate in mid-April. The IMF said Vietnam’s economic expansion might slow down to 5.8% this year and then rebound to 6.9% in 2024, among the highest figures in Asia.