ADB raised Việt Nam’s economy to 7.5% this year

While Việt Nam’s economy is performing well amid uncertainties in the global economy, risks to the economic outlook have become elevated. ADB raised its forecasts for the country’s economy to grow by 7.5 per cent this year.

This information was announced in ADB’s Asian Development Outlook (ADO) 2022, released on Wednesday.

ADB’s forecast Việt Nam’s inflation for 2022 is revised down to 3.5 per cent.

Though trade continues to expand, signs show weakening global demand for the country’s exports. Growth for 2023 is therefore adjusted down to 6.3 per cent as major trade partners weaken, the bank said.

ADB has lowered its economic growth forecasts for developing Asia and the Pacific amid a worsened global outlook.

The region’s economy will grow 4.2 per cent this year and 4.6 per cent next year. ADB estimated in September that the economy would grow 4.3 per cent in 2022 and 4.9 per cent in 2023.

Monetary policy tightening by central banks globally and in the region, the protracted Russian invasion of Ukraine, and recurring lockdowns in the People’s Republic of China (PRC) are slowing down developing Asia’s recovery from the COVID-19 pandemic. Restrictions under the “zero-COVID” approach, along with a struggling property market, have led to another downgrade of the PRC’s growth outlook.

“Asia and the Pacific will continue to recover, but worsening global conditions mean that the region’s momentum is losing some steam as we head into the new year,” said ADB Chief Economist Albert Park. “Governments will need to work together more closely to overcome the lingering challenges of COVID-19, combat the effects of high food and energy prices - especially on the poor and vulnerable - and ensure a sustainable, inclusive economic recovery.”

ADB lowered its forecast for inflation in developing Asia and the Pacific this year to 4.4 per cent from 4.5 per cent. However, the bank raised its projection for next year to 4.2 per cent from 4.0 per cent, due to lingering inflationary pressures from energy and food.

The PRC’s economy is forecast to expand by 3.0 per cent this year, compared with a previous projection of 3.3 per cent. The forecast for next year was cut to 4.3 per cent from 4.5 per cent, due to the global slowdown. GDP growth projections for India were maintained at 7.0 per cent this fiscal year and 7.2 per cent next fiscal year.

Even with the downgraded forecasts, developing Asia will still do better than other regions globally, both in terms of growth and inflation. ADB’s growth forecast for Southeast Asia this year was raised to 5.5 per cent from 5.1 per cent, amid robust consumption and tourism recovery in Malaysia, the Philippines, Thailand, and Việt Nam. Projections for next year, however, were lowered to 4.7 per cent from 5.0 per cent due to weakening global demand.

The growth forecast for the Caucasus and Central Asia this year was upgraded to 4.8 per cent from 3.9 per cent, while the projection for the Pacific was raised to 5.3 per cent from 4.7 per cent, due to a strong tourism recovery in Fiji.

ADO is published every April, with an update in September and brief supplements published normally in July and December. Developing Asia refers to the bank’s 46 developing members.