Standard Chartered forecasts Vietnam's economic growth at a moderate rate

Standard Chartered Bank said that although Vietnam's economic pressure in the short term may still exist, the economy's ability to operate is better than the market's expectations.

In its latest economic update on Vietnam, Standard Chartered Bank forecasts Vietnam's macroeconomic data for October showing a correction in growth compared to September, although key economic sectors remain relatively strong. This slight downward trend can support maintaining low interest rates.

Standard Chartered forecasts Vietnam's GDP growth in 2024 to reach 6.8% (from 6.0%), with growth slowing from Q3. The bank also forecasts Q4 growth is expected to be at 6.9%. Retail sales are likely to reach 6.2% (from 7.6%), the export sector will reach 6.2% (from 10.7%) while electronics exports have improved since the beginning of the year. Imports and industrial production are likely to increase by 4% and 9.2%, respectively. Credit growth remained at about 9% compared to the same period, as of the end of September.

Vietnam has recorded many months of surplus this year and the foreign trade sector is still relatively stable. The monthly trade surplus could rise to $3.8 billion in October from $2.3 billion the previous month, contributing to a series of surplus months this year.

Mr. Tim Leelahaphan, Thailand and Vietnam economist, Standard Chartered Bank, said that although Vietnam's economic pressure in the short term may still exist, Standard Chartered believes that the economy's ability to perform is better than the market's expectations. The Government's push for stronger economic growth could help keep interest rates low for the foreseeable future. Inflation has recently declined but is likely to rise at an estimated 3% in October and is expected to continue to rise annually, with the next increase expected in mid-2025.

"With the rising inflation trend and the possibility of a weakening VND, we expect the State Bank of Vietnam to raise interest rates by 50 basis points in the second quarter of 2025," Mr. Tim Leelahaphan shared.