Vietnam's economy likely to boom in H2: expert

Hanoi - Vietnam’s economy is likely to strongly recover in the second quarter of 2023, said Tim Leelahaphan, Economist for Thailand and Vietnam at Standard Chartered.

In an interview granted to Lao Dong Newspaper, Leelahaphan said Vietnam had experienced a difficult year in 2022, with foreign exchange reserves decreasing remarkably, along with difficulties related to real estate and bond markets, and liquidity problem.

However, the economic situation has gradually improved in the first quarter of 2023, he said, pointing to the recovery of the Vietnam dong and citing Standard Chartered's forecast that the country's GDP growth could reach 7.2 per cent this year and 6.7 per cent in 2024.

Although Vietnam's economy still faces some macro risks such as inflation, public debt and confidence on economic recovery, the prospect of recovery is positive in the second half of 2023, he said.

Leelahaphan said there are at least five challenges facing Vietnam related to economic growth, inflation, foreign reserves, monetary policy and real estate market.

Vietnam’s inflation rate is anticipated to rise from 3.15 per cent last year to 4 - 4.5 per cent in 2023, he said, adding that factors that may impact inflation this year include increasing tuition fees and import inflation.

He, however, noted that Vietnam has experience in inflation control and it will be the top priority in the country’s policy management.

According to the expert, Vietnam will continue to be an important link in the global supply chain and an attractive destination chosen by many businesses.

He said the most important thing now is to speed up the disbursement of public investment to support the economy, adding that strengthening investment in infrastructure development is the key to supporting economic growth.

Vietnam's economy is said to recover strongly from the end of the first quarter. GDP growth is expected to be 6.7 per cent in the year, and 7 per cent in 2023, according to Standard Chartered Bank.

According to an HSBC Research report, 2022 was a year of booming recovery for Vietnam, making the country one of the best performers in Asia.