Viet Nam's economic growth remains resilient: Standard Chartered

In its latest macro-economic updates for Viet Nam, Standard Chartered noted that Viet Nam's economic growth has remained resilient.

Exports grew 14.9 percent year-on-year in the first 10 months of 2024, while imports grew 16.8 percent; with electronics exports and imports continuing their recovery.

The manufacturing sector has experienced solid growth, and relatively accommodative monetary policy may have also contributed to the economic recovery, according to the bank.

Foreign investment appetite remains strong, as indicated by inward foreign direct investment (FDI) flows. Disbursed FDI increased by 8.8 percent year-on-year while pledged FDI rose by 1.9 percent in the same period.

The manufacturing sector accounted for 62.6 percent of total pledged FDI during that period, while the property sector's share was 19 percent, increasing from a year earlier.

Tim Leelahaphan, Economist for Thailand and Viet Nam, Standard Chartered expected the State Bank of Viet Nam (SBV) to hike rates by 50 basis points in the second quarter of 2025.

"The government's desire for stronger economic growth may support low interest rates for now. Inflation could rise again starting in the second quarter of 2025; as such, we expect rate normalization in the second quarter", he shared.

The Federal Reserve System (FED) moves will also be key to the SBV's policy decisions. Lower USD rates may help to reduce capital outflows, while a sustained trade surplus and strong tourism should support the VND; however, low import cover remains a challenge, told the economist./.