ASEAN's growth "star"
According to a recent report by HSBC's global research division, Vietnam's 7.4% growth in the third quarter was much higher than expected. After a "difficult" 2023 and the first quarter of 2024, Vietnam has returned to being the growth star of ASEAN, despite being affected by super typhoon Yagi. With these developments, HSBC raised its 2024 GDP growth forecast to 7% from the previous forecast of 6.5%.
Similarly, in its latest economic update on Vietnam, Standard Chartered Bank raised its 2024 GDP growth forecast for Vietnam to 6.8% (from 6.0%) thanks to better-than-expected Q3 GDP results. Q4 growth is expected to be 6.9%. The 2025 GDP forecast remains at 6.7%, with growth expected to be 7.5% in the first half and 6.1% in the second half compared to the same period last year.
Speaking to Lao Dong Newspaper, Professor Peter J. Morgan from the Asian Development Bank Institute (ABDI) assessed that the positive point is that Vietnam has an open economy with good infrastructure, creating a premise for trade development. However, Vietnam needs to change more in terms of infrastructure structure and from there develop a stronger economy. While the competition in the world is more intense than ever, Vietnam needs to invest more heavily to be able to participate in that race.
According to this expert, the digital economy is currently developing very rapidly, Vietnam needs to take advantage of the educational foundation to improve the quality of human resources through important aspects such as improving labor expertise or knowledge of finance and digitalization.
"To improve the average income level, what Vietnam needs to do is quite similar to Japan. It is about reforming the economic structure, popularizing digital methods, improving the quality of human resources, and making necessary and reasonable reforms" - Professor Peter J. Morgan recommended.
Meanwhile, Dorsati Madani, senior economist at the World Bank in Vietnam, assessed that Vietnam's economic outlook for 2025 and 2026 remains positive with growth forecast at 6.5% for both years. The CPI growth rate for 2025 and 2026 is forecast to be lower than that of 2024 (4.0% and 3.5%, respectively, compared to 4.5% in 2024).
"In terms of policy, in the coming time, to promote economic growth, Vietnam needs to boost public investment disbursement - to make up for the investment shortage in the past decade. In terms of finance, encourage banks to improve their capital adequacy ratio. In terms of capital markets, it is necessary to reform the structure and strengthen the management environment in important backbone services (information and communications technology, electricity, transportation)..." - Dr. Dorsati Madani recommended.
Lots of growth potential
Dr. Le Duy Binh - Director of Economica Vietnam - said that there are many signs and grounds to believe that the economic growth target for 2024 will be achieved at 6.8-7%. The size of the economy could reach about 500 billion USD in 2025. Because looking at the total demand of the economy, there are many positive factors such as strong recovery of import and export activities, which is an important support for growth.
The processing and manufacturing industry has grown well, creating recovery for many businesses and workers. Domestic consumption has remained relatively stable, supporting growth. Private investment has begun to show signs of improvement, contributing to boosting aggregate demand. Disbursement of public investment capital has not reached the desired rate, but is expected to increase sharply in the last quarter of the year.
"We have every reason to expect that Vietnam will achieve its growth target of 6.8-7% in 2024. However, issues such as inflation, disbursement of public investment capital and business performance still need to be monitored and appropriate solutions found," said Dr. Le Duy Binh.
