Vietnamese GDP growth in Q3 projected at 5.3%: Standard Chartered

In the report, the bank’s economists expected domestic retail sales growth to ease to 5.2% and export growth to slow to 6.2%, while electronics exports would continue to improve.

Imports and industrial production are likely grow by 4.0% and 4.2% year on year, respectively, whilst the monthly trade surplus would moderate to US$2.5 billion.

Vietnam has enjoyed trade surpluses for several months his year and the external sector has stayed relatively solid, said Tim Leelahaphan, economist for Thailand and Vietnam at Standard Chartered Bank.

Disbursed FDI rose by 8.0% year on year during the first eight months of the year, with pledges to FDI rising by 7.0% year on year, led by the manufacturing sector.

Inflation may dip to 2.7% in September from the previous 3.5% in August, marking the second straight month that inflation stood at below 4%.

Higher prices for education, housing and construction materials, health care, food, and transport have kept inflation above 4% until recently, with this potentially remaining as a source of upward pressure over the coming months.

“Credit growth has been subdued to 7.4% as of 17 September 2024 compared to an average of 9.0% for the comparable period of 2013-2023,” said Tim Leelahaphan. “We now see a risk to our call for a 50 basic point interest rate hike in the fourth quarter of the year given recent lower inflation, VND appreciation in the third quarter and the expected economic moderation”.

Not only Standard Chartered, but Singapore’s UOB Bank has recently revised its GDP growth forecast for Vietnam in the third quarter of 2024 down to 5.7% from its previous 6% projection and 5.2% for the fourth quarter, down 0.2% from its previous projection. The annual forecast has been slightly revised down to 5.9% due to the impact of Typhoon Yagi and recovery efforts.

In contrast, the Asian Development Bank (ADB) has maintained its GDP growth forecast for Vietnam at 6% for 2024 and 6.2% for 2025, based on the recovery of new orders and consumer demand. HSBC has also held an optimistic outlook, projecting a growth rate of 6.5% for both 2024 and 2025, thanks to supportive government policies.