UOB maintains Vietnam’s GDP growth forecast at 6.6%
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The Singapore-based United Overseas Bank (UOB) has kept its forecast for Vietnam’s GDP growth in 2023 unchanged at 6.6% in line with the official forecast of 6.5%, although growth momentum is likely to be weaker.
In its report on Vietnam’s economic growth in the last quarter of 2022 and prospects for 2023, the bank said Vietnam’s real GDP growth in the fourth quarter of 2022 returned to normal at 5.92% year on year, due to signs of a decline in external demand. There was a sharp increase of 13.67% in the third quarter.
The General Statistics Office (GSO) reported that the country’s GDP expanded by 8.02% in 2022 from the growth of just 2.58% in 2021. This is the fastest pace annually since 1997.
UOB experts said that the strong growth thanks to its manufacturing and service industries in 2022 shows Vietnam’s resilience after the impact of the Covid-19 pandemic.
The bank said the inflation rate is likely to remain stable, especially in the first half of 2023 thanks to the flexible management of monetary policy by the State Bank of Vietnam.
At the end of December 2022, the State Bank of Vietnam said that it will operate monetary policy “flexibly” to keep the inflation rate at 4.5% in 2023, aiming to stabilize the currency and foreign exchange markets.
Questions & Answers
Q.Why does UOB expect growth momentum to be weaker in 2023, despite maintaining its forecast?
Why does UOB expect growth momentum to be weaker in 2023, despite maintaining its forecast?
UOB's report noted a decline in external demand contributed to real GDP growth returning to 5.92% in Q4 2022, following a sharper increase in the previous quarter. This suggests softening conditions.
Q.What contributed to Vietnam's strong GDP growth in 2022?
What contributed to Vietnam's strong GDP growth in 2022?
Vietnam's robust growth in 2022 was primarily driven by its manufacturing and service industries. This demonstrates the country's resilience post-Covid-19 pandemic.
Q.How does UOB expect Vietnam's inflation rate to behave in 2023?
How does UOB expect Vietnam's inflation rate to behave in 2023?
UOB expects Vietnam's inflation rate to remain stable, especially during the first half of 2023. This stability is attributed to the State Bank of Vietnam's flexible monetary policy management.
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