Viet Nam’s GDP pace gains momentum towards the year-end: UOB

In the first nine months of 2023, Viet Nam's economy expanded by 4.24 percent year-on-year, which was an improvement on the 3.72 percent in the first half of 2023.

Official data shows that the economy expanded 5.33 percent year-on-year in the third quarter, accelerating from 4.05 percent in the second quarter and 3.28 percent in the first quarter.

UOB has cut its full-year GDP growth forecast for Viet Nam to 5 percent from the earlier 5.2 percent, the second downward revision in less than two weeks.

The revision has been made with the assumption of further acceleration of real GDP growth in the fourth quarter at 7 percent year-on-year, against the prior forecast of 7.6 percent.

This would still require that activities and orders pick up quickly in the coming months. Traditionally, the fourth quarter is the best performing quarter in any given year in Viet Nam, though the base effect will play a disproportionately large role in 2023 due to the exceptionally strong year in 2022, UOB stated.

Its 2024 projection remains unchanged at 6.0 percent.

UOB pointed out that external demand had made a turnaround, evidenced by expanding exports and rising industrial output.

One reason that conditions are likely to improve further is the continued inflow of foreign direct investment (FDI) into Viet Nam.

Despite a backdrop of weak growth prospects and poor export performances much of the year, foreign enterprises continued to commit to the country in the current wave of de-globalization, de-risking, and supply chains shifts.

Viet Nam's disbursed FDI rose for the fourth straight month in September 2023 with a 2.2 percent year-to-date gain at US$15.9 billion, compared to the 1.3 percent year-on-year increase in the January-August period and the 17.2 percent rise in the January-September period in 2022.

According to UOB, if the same pace continues, full year inflows of FDI are likely to match the US$19.7 billion in 2021./.