HSBC raises Vietnam’s growth forecast to 8.1% this year but downs next year

HSBC has raised Vietnam’s growth forecast from 7.6% to 8.1% this year but revised down the forecast for next year from 6% to 5.8%.
HSBC raises Vietnam’s growth forecast to 8.1% this year but downs next year
Workers process aquaculture products for export. (Photo: VNA)

Meanwhile, a positive sign in Vietnam’s economic outlook is its recovering labour market as its unemployment rate reduced to 2.3% as of the third quarter of this year.

The rate possibly continues to drop as more tourism-relating jobs are expected to add because foreign visitors are returning although the international arrivals to Vietnam so far this year do not reach 20% of that in 2019.

Regarding policy making, HSBC experts believe that Vietnam does not have much fiscal room to apply measures to mitigate the impact of high energy prices. Since April, Vietnam’s authorities have cut several taxes, including fuel and environmental taxes.

On the other hand, HSBC experts also said that Vietnam has started to witness stronger inflation pressure.

The country might also witness a domestic energy shortage, causing inflation to rise.

Although HSBC recently slightly lowered its inflation forecast for Vietnam in 2022 from 3.4% to 3.2%, it has also raised its inflation forecast for 2023 to 4% instead of the previously projected 3.7%. This means that the SBV is likely to continue the tightened monetary policy.

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(Source: VNA)