UOB raises Vietnam's 2024 GDP growth forecast to 6.4%

Singapore-based United Overseas Bank (UOB) has revised up its GDP growth forecast for Vietnam by 0.5 percentage point to 6.4% this year from the previous projection of 5.9%.

The revision is to take account of the year-to-date performance and the disruptions to activities in early the fourth quarter caused by Typhoon Yagi, the bank said.

According to UOB’s Global Economics & Market Research Unit, Vietnam’s GDP in the third quarter expanded by 7.4%, higher than the average market forecast of 6.1%, and UOB’s projection of 5.7%.

This was the fastest pace since the third quarter of 2022 when activities rebounded sharply from the trough of the pandemic, the bank said, adding that this latest figure extended the revised 7.09% gain in the second quarter of 2024, resulting in a cumulative 6.82% year-on-year growth in the first nine months of this year.

UOB’s experts said that the surprise outcome in the last quarter reflected the resilience of the economy, despite the devastation from super Typhoon Yagi.

The service sector was the main driver of Vietnam's GDP growth in the last quarter, contributing 3.24 percentage points, followed by the industry and construction sector with 3.37 percentage points.

Other data in the third quarter reflect the overall resilience of the Vietnamese economy. Both exports and imports in September recorded respective growth rates of 10.7% and 11.1% compared to the same period last year, marking the 7th consecutive month of double-digit growth in the year.

The country’s export earnings rose by 14.6% year-on-year in the last nine months, while its imports increased by 16.5% compared to the same period last year. Vietnam posted a trade surplus of 20.8 billion USD in the period.

Notably, the upswing in semiconductor sales since mid-2023 suggests that the momentum will likely be sustained in the one to two quarters ahead, UOB said.

The bank kept their growth forecast for Vietnam in 2025 unchanged at 6.6%.