Vietnam’s economy set for strong rebound in 2024: ADB

Vietnam’s GDP growth is forecast to hit 5.2% this year but will rebound to 6% in 2024, according to ADB’s latest Asian Development Outlook report.

Electronics production at Meiko Vietnam Company in Thach That Industrial Park, Hanoi. Photo: Hai Linh/The Hanoi Times

The ADB's growth projection for Vietnam next year is similar to the target set by the National Assembly at 6-6.5%. 

“Weaker than expected recovery of external demand continued to impede industry and services output, dragging the recovery in jobs and domestic consumption. On the supply side, economic growth is being impeded by lower industry and services output,” noted ADB.

Meanwhile, Vietnam’s headline inflation edged up to 3.2%, while core inflation was at 4.3% in the first 11 months of 2023 on the recovery in trade and price increases of imported fuel and electricity tariffs.

The figure, however, was still well below the central bank’s 4.0%–4.5% target for 2023.

“Vietnam’s prudent and proactive monetary policy, supported by price controls on gasoline, electricity, food, health care, and education, should keep inflation in check,” stated the report.

The inflation forecasts are maintained at 3.8% for 2023 and 4.0% for 2024, it said.

Looking across the Asian and Pacific region, ADB suggested the regional economy is expected to grow 4.9% this year.

China’s economy is projected to expand by 5.2% this year, compared with a previous forecast of 4.9%, after household consumption and public investment boosted growth in the third quarter. The growth outlook for India has been raised to 6.7% from 6.3% following faster-than-expected expansion in July-September, driven by double-digit growth in industry. The upgrades for China and India more than offset a lowering of the forecast for Southeast Asia, caused by lackluster performance in the manufacturing sector.

“Developing Asia continues to grow at a robust pace, despite a challenging global environment,” said ADB Chief Economist Albert Park. “Inflation in the region is also gradually coming under control. Still, risks remain, from elevated global interest rates to climate events such as El Niño. Governments in Asia and the Pacific need to remain vigilant to ensure that their economies are resilient and that growth is sustainable.”

The region’s inflation outlook for this year has been lowered to 3.5% from an earlier projection of 3.6%, according to ADO December 2023. For next year, inflation is expected to edge up to 3.6%, compared with a previous forecast of 3.5%.

The growth outlook for Southeast Asia this year has been lowered to 4.3% from 4.6%, amid weak demand for manufacturing exports. The outlook for economies in the Caucasus and Central Asia has been raised slightly, while projections for Pacific economies are unchanged.