Vietnam Maintains Highest GDP Growth Rates in Southeast Asia over Last Decade: US Website

Vietnam’s GDP grew 5.3% in the third quarter of this year. Photo: VNA

Vietnam’s GDP growth rate remained strong at 5.3% in the third quarter of this year, according to an article published on October 25. The growth is fueled by households utilizing their savings accumulated during the Covid-19 pandemic.

Vietnam has emerged as the best-performing market in the region, driven by positive geopolitical factors and unexpected rate cuts by the State Bank of Vietnam. However, recent developments indicate a decline in investor optimism due to the country’s dependence on external demand from major trading partners such as the US, the EU, and China. Concerns are also rising about inflationary pressures from rising oil and rice prices, which may delay further rate cuts.

Despite these challenges, the article emphasizes that these commodity pressures are temporary and will not affect the State Bank of Vietnam’s interest rate policy. It is expected that interest rates will be lowered in the near future, boosting lending activities and supporting real estate firms in managing their inventories.

Vietnam’s growth engine is still active. Photo: Vietnamnet

Although trade has weakened and inflationary pressures have increased, Vietnam’s income growth is expected to continue to rise in the coming years. The country’s structural earning growth remains strong and is poised to exceed expectations.

The article also highlights Vietnam’s progress toward emerging market reclassification, which is expected to bring further benefits to the country. Standard Chartered Bank predicts a robust GDP growth rate of 6.7% for Vietnam in 2024, despite revising down the country’s 2023 GDP growth forecast to 5.0%.

Standard Chartered Bank maintains a robust GDP growth forecast of 6.7% for Vietnam in 2024. Photo: tapchitaichinh.vn

The bank has revised its 2023 GDP growth forecast for Vietnam to 5.0%, down from the previous forecast of 5.4%. The revised forecast is still challenging and would require a strong growth rate of 7.0% in the fourth quarter.

The report notes a tentative improvement in macro indicators, with ongoing domestic recovery and potential strengthening in retail sales. Sectors such as construction and accommodation continue to experience strong growth, while manufacturing is starting to expand. The external outlook is also improving, with a rising current account surplus.

Inflation forecasts for 2023 have been revised upward, and the fourth quarter is expected to see a higher inflation rate. Inflation may lead to a search-for-yield behavior and increased risks of financial instability. Education, housing, food, and transport costs have been major contributors to recent inflationary pressures.