Vietnamese economy proceeding as predicted: experts

Vietnam's GDP in the first quarter of 2024 will grow by around 5.5% as predicted, according to experts and thinktanks.

Singapore’s United Overseas Bank (UOB) has based its assessment of the macroeconomic indicators in the first two months of 2024, concluding that Vietnam’s economic recovery is heading in the right direction.

In the first two months, Vietnam’s exports increased by 17.6% from the same period last year, and industrial production grew by 5.7% year-on-year. Suan Teck Kin, head of UOB’s Research, Executive Director, Global Economics and Markets Research, said these data indicate positive signs of momentum in both production and external trade sectors.

To support its assessment, the UOB also highlighted Vietnam's Purchasing Managers' Index (PMI), which is quite positive, as it has remained above 50 points in both January and February. In early March, S&P Global also emphasised the improvement in the manufacturing industry, albeit the improvement was slight.

Vietnam’s PMI hits 50.4 points in February, up slightly from the 50.3 points recorded in January and above the 50-point threshold for the second month in succession.

Andrew Harker, Economics Director at S&P Global Market Intelligence, also said Vietnamese manufacturers were able to build on the return to growth seen in January with a further expansion in February.

Particularly positive elements of the latest PMI survey were renewed job creation and the strongest business confidence for a year, he stressed. Meanwhile, analysts of the Vietcombank Securities Company, Ltd (VCBS) said the country’s GDP growth will reach 5.5-5.8% in the first quarter of 2024.

In their forecasts, both the UOB and the VCBS predicted that growth will gradually recover in the second half of the year.

UOB said it hopes that the current growth rate will be sustained, especially in the second half of 2024, as the recovery in the semiconductor sector becomes more robust and central banks globally begin to implement more appropriate interest rate policies, said Suan Teck Kin.

According to him, the UOB still maintains its forecast that Vietnam’s GDP will expand by 6% in 2024 as the economy recovers further towards the pre-COVID-19 pandemic pace

Meanwhile, the VCBS evaluated that the pace of economic recovery will only significantly improve in the second half of 2024, noting that the Government’s support measures are moving in the right direction, but more time is needed for these measures to take effect on the economy.

According to Deputy Minister of Planning and Investment Tran Quoc Phuong, fiscal policies, including promoting disbursement of public investment, will be promoted, serving as an important driving force for the economy to achieve the growth target of 6-6.5% this year.