HSBC maintains its forecast for Viet Nam's GDP growth rate at 6.5%

In its latest report "Asian Economics Quarterly- Comin,' the bank made the most optimistic forecast among international organizations.

The report said that Typhoon Yagi has hit Viet Nam particularly hard after making landfall on September 7, 2024. The government has reportedly estimated damage worth $US2 billion with widespread flooding and damage across factories, warehouses, and power infrastructure.

Although recovery efforts and a resumption of operations are under way, the after-effects of Asia's strongest typhoon so far this year are expected to persist for weeks.

The manufacturing sector emerged strongly from last year’s woes. Purchasing Managers' Indexes (PMIs) have registered five consecutive months of expansion, while industrial production index (IPI) has registered a bounce-back in activity for the textiles and footwear industry as well.

HSBC noted that the domestic sector is recovering more slowly than initially expected, with retail sales growth still below the pre-pandemic trend. Encouragingly, the government has put in place measures to support a wide range of domestic sectors that is expected to shore up confidence with time.

The bank also sustains inflation forecasts at 3.6 percent in 2024, well below the State Bank of Viet Nam’s target ceiling of 4.5 percent. For 2025, we keep our inflation forecast at 3 percent.

Prime Minister Pham Minh Chinh called for all efforts to restore livelihoods to achieve the government’s growth target of 7 percent, which is higher than that set by the National Assembly of 6 - 6.5 percent at the end of 2023.

S&P Global, a U.S.-based market intelligence company, revised up Viet Nam's GDP growth this year to 6.2%, in its latest "Economic Outlook Emerging Markets Q4 2024" report. The figure is higher than the 5.8 percent figure in a June report by S&P Global.

The Asian Development Bank (ADB) projected a positive economic outlook for Viet Nam, forecasting its GDP growth at 6 percent in 2024 and 6.2 percent in 2025.

Meanwhile, the International Monetary Fund (IMF) predicted Viet Nam's economic growth at 6.1 percent in 2024 in its latest note, up from 5.8 percent forecast in April./.