Viet Nam likely to be fastest-growing economy in ASEAN this year: HSBC

Viet Nam is likely to be the fastest-growing economy in ASEAN in 2024, HSBC noted in its report Viet Nam at a glance released on Wednesday.

The bank expressed belief that Viet Nam remains on track to see brighter growth prospects in 2024, if the recovery continues to broaden out.

HSBC upgrades its yearly GDP growth forecast this year to 6.5 percent from the previous prediction of 6 percent thanks to the nation's better-than-expected growth outturn in the second quarter of this year.

According to HSBC, Viet Nam ended the second quarter of this year with a massive upside surprise to its GDP growth, which accelerated to 6.9 percent year-on-year, well above market expectations of 6 percent.

Beyond headline numbers, its recovery has started to show signs of broadening out. For trade, the tech recovery continues to fuel the much-needed steam while other sectors have also bottomed out to return to decent growth.

Meanwhile, tourism-related services continue to shine, after Viet Nam welcomed more than 8.8 million tourists in the first half. In particular, even without a visa-free scheme, the return of Chinese tourists approached 80 percent in the equivalent period.

"While Viet Nam is on track to reach its annual goal of welcoming 17-18 million tourists in 2024, we still see room for further improvement, including an expansion in the visa exemption list," the bank suggested.

Remarkably, the manufacturing sector expanded 10 percent year-on-year. This is also reflected in strong growth in the second quarter exports of 15 percent year-on-year.

While the trend continues to hold, non-electronics shipments have started to show green shoots. In particular, exports of textiles and footwear, which are more exposed to the Red Sea disruptions, also bounced back to see double-digit growth in the second quarter.

Viet Nam’s GDP expanded by 6.42 per cent year-on-year in the first half of this year, the General Statistics Office (GSO) reported.

In comparison with the figures recorded in the same period during the 2020-2024 period, the above growth pace is only lower than the first half of 2022.