HSBC upgrades Viet Nam’s growth forecast to 8.1%
VGP - HSBC has raised its 2022 growth forecast for Viet Nam from 7.6 percent to 8.1 percent, a prediction that if manifested would make the country the second fastest growing economy in ASEAN.
A view of Ho Chi Minh City - Illustration photo
HSBC’s experts assessed that 2022 is a year of booming recovery as the Southeast Asian nation set to remain one of Asia’s outperformers thanks to a 13.7 percent GDP expansion in the third quarter.
Viet Nam’s unemployment rate dropped to 2.3 percent by the third quarter and that number is expected to drop as jobs in tourism-related sectors could boom when the travel industry resumes.
But increasing trade headwinds have also brought a few clouds to the horizon of Viet Nam’s optimistic growth outlook.
After growing over 17 percent year-on-year in the first three quarters of 2022, export growth mellowed significantly in October, with November then seeing the first meaningful year-on-year decline in two years.
The primary drag came from electronics shipments, which account for 35% of Viet Nam’s total exports. The economic slowdown in the U.S. has exacerbated Viet Nam’s export woes, as the North American economic powerhouse is the largest market for many of Viet Nam’s goods exports.
Viet Nam is also now under the pressure of stronger inflation, with the latest data exceeding the State Bank of Viet Nam’s 4 percent inflation growth "ceiling."
Not only has core inflation accelerated, but Vietnam is also experiencing a domestic energy shortage, keeping headline prices high in the sky.
The international bank has also emphasized that the biggest risk to growth in Viet Nam is intensifying trade headwinds.
Previously, last week, ADB upgraded Viet Nam’s growth forecast this year to 7.5 percent.
Standard Chartered Bank raised its GDP growth forecast for 2022 to 7.5 percent from the previous 6.7 percent and for 2023 to 7.2 percent from 7 percent./.
