HSBC expects Viet Nam’s economy to grow faster in 2024

In the report on the first half of 2024 investment outlook released by HSBC on January 23, James Cheo highlighted that the strength of Viet Nam economy in 2024 will come from a combination of consumer and investment spending.

The strong inflows of foreign direct investment (FDI) will likely continue in 2024 buttressing Viet Nam's manufacturing sector. The nascent recovery of the global trade cycle will boost the nation's exports. Furthermore, Viet Nam is likely to witness a gradual uptick in international tourism, he underlined.

"Inflation is fairly stable but there could be a upside risk from higher-than-expected energy or food prices, we think that Viet Nam's monetary authority will stay vigilant and keep policy rates on hold for this year. We forecast the VND to move towards 24,400 against the USD by the end of 2024," says Cheo.

He referred to promising secular growth opportunities in India and ASEAN, riding on the structural tailwinds from strong foreign and domestic private investments, young demographics, the technology boom, and green transformation

Disinflation is on track in most Asian economies, with inflation now expected to return to central bank target ranges in 2024 in most countries, ahead of most other regions, he noted.

"We believe Asian yields are peaking and expect policy rate cuts in Australia, mainland China, Hong Kong, India, Indonesia, South Korea, the Philippines and Singapore in 2024 to bring policy tailwinds for the Asian bond markets in the coming year," said Cheo.

The Vietnamese Government targets to boost GDP growth to 6-6.5 percent in 2024 from 5.05 percent in 2023.

Viet Nam lured nearly US$36.61 billion in foreign investment in 2023, up 32.1 percent against the previous year, the Foreign Investment Agency under the Ministry of Planning and Investment revealed.

In 2023, the country received 12.6 million international visitors, up 3.4 times against the previous year./.