Standard Chartered forecasts Vietnam’s economic growth at 6.7% in 2022

Standard Chartered has forecast Vietnam’s GDP growth at 10.8% in the third quarter and 3.9% in the last quarter of 2022, contributing to annual expansion of 6.7%.

Strong economic recovery will be seen in the latter half of the year, especially when the tourism sector has reopened after a two-year shutdown, according to Tim Leelahaphan, Standard Chartered's economist for Thailand and Vietnam.

Economists at the bank also projected that the State Bank of Vietnam will keep the interest rate at 4% this year to assist businesses and the recovery process despite growing inflation. Retail sales will continue improving strongly, with 30.2% in July, compared to 27.3% in June.

Imports, exports and industrial production are predicted to respectively increase by 22.2%, 20% and 15% in July, compared to 20%, 16.3% and 11.5% in June. Meanwhile, Vietnam is likely to record a trade deficit this month, they said.

Inflation will accelerate to 3.6% in July from 3.4% in June - the fastest pace in two years, mostly due to supply pressure while demand is also gradually increasing, Leelahaphan noted, adding that inflation is still under control at present.

Recently, HSBC raised Vietnam’s growth outlook this year to 6.9% from the previous prediction of 6.6% but also downgraded the forecast for 2023 to 6.3% from 6.7%.

The Singapore-based United Overseas Bank (UOB) also revised up the country’s 2022 GDP growth forecast to 7.0% from 6.5%, assuming no further severe domestic disruptions from COVID-19, and growth of around 7.6% - 7.8% in the second half of the year.

Meanwhile, the Asian Development Bank (ADB) maintained its growth forecast issued in mid-April, at 6.5% for 2022 and 6.7% for 2023.

In the first half of 2022, Vietnam’s GDP grew 6.4% from the same period last year thanks to the expansion of 9.7% in the manufacturing sector and 6.6% in the service sector./.