ADB forecasts Vietnam to grow 5.8% in 2023

The Asian Development Bank (ADB) has just released its Asian Development Outlook (ADO) report for July 2023, in which it lowered Vietnam's growth forecast in 2023 from 6.5% to 5.8%, and from 6.8% to 6.2% in 2024.

Weak external demand continues to weigh on industrial production and manufacturing, while domestic conditions are expected to improve. Vietnam’s inflation is forecast to slow to 4% in 2023 and 2024, according to ADB.

Previously, a number of organizations also lowered their forecasts for Vietnam's economic growth this year after the General Statistics Office announced that GDP in the second quarter and the first six months of 2023 grew at low levels, at 4.14% and 3.72%, respectively.

ADB Bank lowers Vietnam's growth forecast.

Some domestic and foreign organizations believe that Vietnam's growth target of 6.5% this year is a big challenge.

BIDV Training and Research Institute forecasts GDP growth for the whole year of 2023 (baseline scenario) at about 5-5.5% (lower than the forecast of 5.5-6% in March).

The Asia- Pacific region is forecast to grow 4.8% in 2023 as strong domestic demand continues to support the region’s recovery, according to the ADB. Inflation is expected to continue to decline, moving closer to pre-pandemic levels as fuel and food prices decline.

Inflation in developing Asia is forecast at 3.6% this year, down from the 4.2% forecast in April 2023. Meanwhile, the forecast for 2024 inflation has been raised to 3.4% from the previous estimate of 3.3%.

The ADB forecasts China's economy will grow 5% this year, unchanged from its April forecast, amid strong domestic demand in the services sector. China's reopening is seen by the ADB as boosting regional growth.

However, demand for developing Asia's exports of electronics and other manufactured goods is slowing, as tight monetary policy leads to a slowdown in economic activity in major developed economies.

ADB Chief Economist Albert Park said Asia and the Pacific continues to recover from the pandemic at a steady pace. Domestic demand and services activity are driving growth, while many economies are also benefiting from a strong recovery in tourism.

However, according to this person, industrial activities and exports remain weak, leading to a decline in growth prospects and global demand next year.

ADB kept its growth forecasts unchanged for most subregions in Asia and the Pacific. Exceptions include Southeast Asia, where the outlook was lowered to 4.6% this year and 4.9% next year, from April estimates of 4.7% and 5.0%, respectively.

The forecast for the Caucasus subregion and Central Asia is revised down slightly, from 4.4% to 4.3% for 2023 and from 4.6% to 4.4% in 2024.

Low GDP growth, deep interest rate reduction: What is the target for the economy and stocks? The stock market fluctuates strongly when profit-taking pressure increases sharply. However, there are signs of cash flow not being withdrawn and foreign investors are actively buying. The real estate market shows signs of warming up along with the stability of the macro economy.

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