Vietnam’s Q2 GDP growth surged to 6.9%, the highest in two years and well above market expectations of 6%.
![](http://media.hanoitimes.vn/2021/05/14/logo_hntimes.png)
Given Vietnam’s better-than-expected economic performance in the first half of the year, HSBC has raised its GDP growth forecast for the country from 6% to 6.5%.
Hanoi from above. Photo: Thanh Hai/The Hanoi Times |
If achieved, Vietnam could become the fastest-growing economy in Southeast Asia in 2024, a position held by Malaysia and the Philippines in 2022 and 2023, HSBC noted in its latest report.
Following strong economic growth in Q2 and the first half of the year, the Government has revised its target to 7% growth this year, higher than the 6-6.5% goal set by the National Assembly. Currently, many international financial organizations, including the IMF, ADB, UOB, and Standard Chartered, forecast Vietnam's growth at 6% this year. Meanwhile, the World Bank offers a more cautious projection of 5.5%. It noted that HSBC said its decision to raise its forecast was based on signs of a broad-based economic recovery in the first half of the year.
Vietnam’s Q2 GDP growth surged to 6.9%, the highest in two years and well above market expectations of 6%.
The most surprising sector was manufacturing, which grew by 10% compared to the same period in 2023, leading to a 15% increase in Q2 exports. Producer sentiment also improved markedly, with the Purchasing Managers' Index (PMI) in June rising sharply to 54.7, the highest in two years.
According to HSBC, the encouraging signs of rising employment and new export orders in recent months are a positive indication for Vietnam's manufacturing sector. Additionally, retail revenue growth has not yet returned to pre-pandemic levels, but tourism-related services continue to show positive momentum. The National Assembly recently agreed to extend the VAT reduction from 10% to 8% until the end of the year and reduce some fees for certain sectors.
This move is expected to provide some support to the domestic economy. Additionally, inflation is likely to have peaked in June and is expected to decline over the remainder of the year, provided there are no significant disruptions to the pork supply due to disease.
However, HSBC advises close monitoring of the stability of the international trade recovery and its potential spillover effects on domestic economic sectors. The bank also maintains its view that the State Bank of Vietnam will keep the policy interest rate steady at 4.5% this year despite ongoing concerns about foreign exchange rate stability.
Other News
- Cashless parking in Hanoi: Good model fuels smart transport
- Banking sector dominates Vietnam’s corporate bond market
- Prime Minister expects lending to grow by 15% this year
- Vietnam, Singapore strengthen partnership in stock exchange operations
- HSBC raises Vietnam’s GDP growth forecast to 6.5% in 2024
- Hanoi to push for smart tax agency
- Taxes revenue from online shopping in Vietnam nearly triple in H1
- Banks inject over US$20 billion into economy in June, surpassing five-month total
- Corporate bond issuance almost triples in H1
- Vietnam climbs 11 places in budget transparency ranking
Trending
-
Prime Minister urges swift response to super typhoon Yagi
-
Vietnam news in brief - September 7
-
Hanoi to ensure sufficient food supplies ahead of super typhoon Yagi
-
Vietnamese film wins two awards at Venice Film Festival
-
Pickleball is not to blame, it's the players
-
Colorful Guizhou Airlines chooses Hanoi as its first international destination
-
Green consumption for sustainable development in Hanoi businesses
-
Vietnam seeks further contributions from overseas Vietnamese
-
Patriotism: The tranquil and steady devotion of a lifetime