Viet Nam’s economic recovery to accelerate remarkably in H2: Standard Chartered

A garment and textile production line. Standard Chartered maintained its forecast for Viet Nam’s GDP growth at 6.7 per cent this year. — VNA/VNS Photo

Viet Nam’s economic recovery will be stronger in the second half of 2022, particularly as the country resumed its tourism activities after a two-year closure, according to Standard Chartered’s latest Viet Nam report.

The report said the Vietnamese economy would see a continued recovery in August as the recovery has shown signs of broadening.

The bank maintained its forecast for Viet Nam’s GDP growth at 10.8 per cent and 3.9 per cent in the third and fourth quarters of this year, respectively, taking the full-year growth to 6.7 per cent.

Tim Leelahaphan, Standard Chartered Economist for Thailand and Viet Nam, anticipated that the recovery will accelerate remarkably. However, he also warned that high global oil prices may have negative impacts on the Vietnamese economy.

Retail sales are estimated to grow strongly, at 60.2 per cent in August, from 42.6 per cent in the previous month, the report added.

Industrial production, export and import are expected to increase by 15.2 per cent, 15 per cent and 15.2 per cent respectively this month compared to 9.8 per cent, 3.4 per cent and 11.2 per cent in July.

Viet Nam may record a trade deficit this month which is likely to stand at around US$1.4 billion. Electronic products remained the country’s biggest currency earner.

Inflation is projected to stand at 3 per cent in August, compared to 3.2 per cent in July, which is within a manageable level. Price pressure may increase in the second half of 2022 and in 2023.

The bank recommended the State Bank of Vietnam be wary of financial instability risks.

Experts from HSBC have also predicted that despite a less rosy external picture, Viet Nam’s economy continued to gain traction.

Textile, garment and footwear exports rose by 30 per cent from a year earlier. Retail sales posted a record growth rate of over 55 per cent last month compared to the same period last year. In particular, revenue of tourism-related sectors was considerable, witnessing a double-digit expansion for four straight months.

Also in July, Viet Nam attracted more than 350,000 foreign tourist arrivals, tripling the monthly average in H1, and bringing total visitors to the country so far to over 1 million. Those from the Republic of Korea, Europe and the US accounted for nearly half of the total figure. — VNS