Vietnam's GDP in Q1/2024 expected to increase by 6.1%

Recovery thanks to retail sales

Standard Chartered also maintains its forecast for full-year GDP growth in 2024 at 6.7%, with GDP accelerating from 6.2% in the first half of the year to 6.9% in the second half.

According to Standard Chartered, March data shows signs of recovery after the Lunar New Year, thanks to retail sales. Retail sales growth is forecasted to reach 9.2% in March, compared to the same period last year; exports are expected to rebound by 5.2%; imports are projected to reach 5.0%.

The trade surplus may narrow to $0.8 billion. Inflation could rise to 4.2% in March compared to the same period (from 4.0% in February). Prices of education services, housing (construction materials), and food have recently driven inflation. Strong GDP growth will be needed for FDI inflows to recover significantly.

Mr. Tim Leelahaphan, an economist specializing in Vietnam and Thailand at Standard Chartered Bank, shared: "Although the Q1 growth prospects may slow down, we believe Vietnam continues to maintain its recovery momentum. However, the bank remains cautious about the overall growth outlook for the first half of the year due to challenges from global trade."

Standard Chartered predicts that the State Bank of Vietnam will maintain its refinancing rate at 4.5% until the end of Q3/2024 and increase it by 50 basis points in Q4, amid concerns about inflation due to growth.

Earlier, in the report on the Economic - Social Situation of February and the first two months of 2024, the General Statistics Office stated that the economic - social situation in February 2024 occurred amidst the country's celebration of the Lunar New Year, with tourism and overall services vibrant. With the determination to create breakthrough momentum for socio-economic development as set out in the objectives, the Government, Prime Minister directed ministries, sectors, and localities to focus on implementing Resolution No. 01/NQ-CP dated January 5, 2024, on tasks, key solutions to implement the Socio-Economic Development Plan and State Budget Estimate for 2024; Directive No. 06/CT-TTg dated February 15, 2024 of the Prime Minister on key tasks, solutions after the Lunar New Year.

According to the General Statistics Office, the index of industrial production in the first two months of 2024 is estimated to increase by 5.7% compared to the same period last year (a decrease of 2.9% in the same period of 2023), with processing and manufacturing industries increasing by 5.9%. Some key industries at level II showed high growth rates such as: Chemical production and chemical product manufacturing increased by 27.7%; production of coke, refined petroleum products increased by 25.3%; production of rubber and plastic products increased by 24.3%; production of beds, wardrobes, tables, chairs increased by 23.4%; pharmaceutical production increased by 23.2%; electrical equipment manufacturing increased by 22.1%; textiles increased by 17.6%.

The total import-export turnover of goods in the first two months of 2024 increased significantly compared to the same period last year with a growth rate of 18.6%. Specifically, the export turnover of goods reached $59.34 billion, up 19.2% (domestic economic sector alone increased by 33.3%); import turnover reached $54.62 billion, up 18%. The trade balance is estimated to achieve a surplus of $4.72 billion (compared to a surplus of $3.5 billion in the same period last year).

Inflation is controlled at an appropriate level. In the first two months of 2024, the CPI increased by 3.67% compared to the same period last year; core inflation increased by 2.84%.

Source: Standard Chartered Bank, Cafef

Compiled by VBI