Vietnam’s recovery to gain momentum in Q2: Standard Chartered
The country remains a manufacturing hub and a key link in the global supply chain despite geopolitical and pandemic-related challenges.
Vietnam is expected to maintain its 2022 GDP growth at 6.7% as the recent bounce in economic indicators has become more broad-based.
A property project in Dong Anh District, Hanoi. Photo: Pham Hung/ The Hanoi Times |
Such were the conclusions drawn by Standard Chartered Bank in its recently released marco-economic report titled “Vietnam - Recovery to gain momentum in Quarter 2”.
The recovery is likely to accelerate markedly in late Quarter 2 (Q2) as domestic demand and tourism recover even though short-term uncertainty prevails, particularly around the tourism recovery and pandemic risks.
Tim Leelahaphan, economist for Thailand and Vietnam at Standard Chartered said: “The government lifted its quarantine requirement for international arrivals in mid-March. We think the reopening of tourism, which accounts for close to 10% of GDP, is the key development to watch in Q2-2022 after a two-year closure.”
According to Standard Chartered’s economists, Vietnam remains a manufacturing hub and a key link in the global supply chain despite geopolitical and pandemic-related challenges. Inward FDI has resumed growth this year after contracting in 2021. The bank expects this to continue, particularly in sectors such as manufacturing and electricity, gas, and air conditioner supplies.
Leelahaphan underlined foreign investors remain the key driver of Vietnam's contribution to the global supply chain. Several major global tech companies have shifted (or made plans to shift) production to Vietnam from China in recent years to diversify their supply chains.
“Vietnam remains attractive as a regional manufacturing hub for sectors including electronics, textiles, garments and footwear,” he added.
Standard Chartered Bank maintains its 2022 and 2023 inflation forecasts of 4.2% and 5.5%, respectively for Vietnam. Supply-side factors pose upside risks to inflation, particularly given the ongoing geopolitical situation. Over the medium term, demand-push inflationary factors are likely to kick in as the economy recovers.
The bank holds a constructive view of the VND, driven by a supportive external balance. Vietnam’s Current Account is likely to remain in a surplus this year, despite higher commodity prices, amid a recovery in tourism. It forecasts USD-VND at 22,300 by end-2022 and 22,000 by end-2023.
Other News
- Vietnam’s c.bank sells USD to stabilize exchange rate
- Central bank to auction gold to calm domestic market
- Vietnam's Central Bank ready to steady foreign exchange market
- Finance ministry clears bottlenecks to pave way for stock market upgrade
- Over 60% of Vietnamese use QR codes to pay
- Casinos contribute US$370 million to state budget over 5 years
- Standard Chartered and IATA partner to launch IATA Pay in Vietnam
- Vietnam’s capital market shows positive signs: Finance Ministry
- Prime Minister urges banks to cut lending rates further
- Potential upgrade to emerging status may pull US$25 billion into Vietnam’s stock market
Trending
-
Culture is national asset: Vietnam PM
-
Vietnam news in brief- April 19
-
Cultural similarities provide basis for Vietnam-Italy cooperation in various fields
-
[Video]Hanoi beauty spots featured in saxophone legend Kenny G's music video
-
Colorful stage shows in Hoan Kiem Lake pedestrian area
-
It happened as it had to happen
-
Hanoi street where dead appliances come back to life
-
Vietnam’s economy urged to rely on internal strengths to weather global uncertainties: ADB
-
Vietnam, Thailand advance realization of “Three Connections” strategy