Export and consumption recovery significantly boost growth

Vietnam's economic growth is expected to accelerate in 2024, driven by a recovery in manufacturing exports, consumer tourism and investment, according to a new report by the World Bank (WB).

Production and exports recovered, significantly boosting economic growth, according to the WB.

According to a recently released World Bank (WB) report, Vietnam's economic growth rate is expected to be higher in 2024, thanks to the recovery of exports of manufactured goods, tourism, consumption and investment.

Specifically, Vietnam's economy is forecast to grow 6.1% in 2024, 6.5% in 2025 and 2026, higher than 5% in 2023, showing the resilience of the Vietnamese economy in the context of increasing global challenges.

The forecast takes into account the higher starting point effect from H2 2023, assuming that manufacturing export growth slows in H2 2024, after recovering by 16.9% (y/y) in H1 2024, and global demand is expected to slow in 2024.

One of the main risks to economic growth is the uncertainty of global economic growth that could be lower than expected, especially growth in Vietnam's major trading partners such as the US, EU and China.

"These developments could affect Vietnam's exports of manufactured goods and negatively impact growth," the report said.

In addition, domestically, macroeconomic instability can have a negative impact on consumer and investor confidence, affecting consumption and investment.

Mr. Sebastian Eckardt, Head of Macroeconomics, Trade and Investment Department for East Asia and the Pacific of the World Bank said: "Vietnam's economy benefited from the recovery in export demand in the first half of this year. To maintain growth momentum from now until the end of the year and in the coming years, the authorities need to continue institutional reform, boost public investment, and manage and monitor risks in the financial market."

According to the World Bank, higher-than-expected growth in the global economy could boost a sustainable recovery for Vietnam's export sector. Looser monetary policy in major developed economies has been initiated at the European Central Bank and the Bank of England, combined with the US Federal Reserve signaling a possible interest rate cut in September, could further boost aggregate demand in developed economies and boost Vietnam's exports.

The World Bank recommends that Vietnam needs to boost public investment to both stimulate short-term demand and contribute to solving the problem of infrastructure shortage, especially in the fields of energy, transport and logistics (which are bottlenecks hindering growth).

Diversifying trade to further enhance integration will also be a factor in improving the resilience of Vietnam's economy.

Source: https://baodautu.vn/xuat-khau-tieu-dung-phuc-hoi-thuc-day-dang-ke-cho-tang-truong-d223393.html