ADB maintains Viet Nam’s economic growth at 6% this year

ADB Country Director for Viet Nam Shantanu Chakraborty made the above statement at a session held in Ha Noi on Thursday to discuss the Asian Development Outlook Supplement for July 2024.

Shantanu Chakraborty said, the first half of 2024 was quite impressive, with GDP growth at 6.4 percent compared to the same period last year.

This was mainly driven by strong trade recovery, where export grew by 14.5 percent and import by 17 percent over last year.

However, the domestic segment remained sluggish, with final consumption growing by only 5.8 percent, he noted.

According to the ADB Country Director, Viet Nam can maintain its growth momentum in 2024 through sustained trade recovery in export-led manufacturing and positive inflows of foreign direct investment (FDI) and remittances, while making more efforts for growth restoration in services, stable agriculture production, and domestic consumption recovery.

Inflation is also expected to remain benign at 4 percent in both these years, despite persistent pressure from geopolitical tensions and disruptions in global supply chains.

Though the economy is expected to post a solid growth this year and growth at a slightly higher pace next year, several external downside risks could slow down Viet Nam's momentum.

The risks include softened global demand caused by slow economic recovery among its trading partners and continued geopolitical tensions, both of which would slow down the recovery of Viet Nam's export-led growth; and lower pace of normalization of interest rates in the U.S. and other advanced economies, which would continue to put pressure on the exchange rate.

"Growth in 2024 also depends on effective implementation of the government's fiscal measures and public investment", stated Shantanu Chakraborty.

The ADB has slightly raised its economic growth forecast for developing Asia and the Pacific this year to 5 percent from a previous projection of 4.9 percent, as rising regional exports complement resilient domestic demand. The growth outlook for next year is maintained at 4.9 percent./.