ADB brings down Vietnam’s growth forecast to 5.2%

The bank said that Vietnam’s economy slowed more than expected in the first nine months, growing 4.2%, half the rate of the same period last year.

The weaker growth reflects the cumulative impact of falling external demand, ineffective budget execution, and a sluggish recovery in the job marker and sluggish domestic consumption, the lender said in a recent report.

On the supply side, economic growth is being impeded by lower industry and services output.

Because of the unanticipated slowdown, the official forecast for Vietnam’s growth for 2023 had been revised down to 5.2% from September’s 5.8% projection, the bank said, adding that it is keeping its forecast for 2024 unchanged at 6.0%.

ADB earlier this year pegged Vietnam’s growth at 6.5% and has been lowering its forecast ever since.

Vietnam’s inflation hit 4.3% in the first 11 months because of the recovery in trade and price increases on imported fuel and electricity tariffs. The country set inflation target of 4.0-4.5%.

“The country’s prudent and proactive monetary policy, supported by price controls on gasoline, electricity, food, health care, and education, should keep inflation in check,” according to ABD.

The bank forecast Vietnam’s inflation to reach 3.8% this year and 4.0% next year.

Prime Minister Pham Minh Chinh in October forecast that Vietnam’s GDP will be just over 5% this year, against 8% last year.

The government will continue to prioritize promoting growth, maintaining macroeconomic stability, controlling inflation and ensuring major balances of the economy.