Expectation for Vietnam’s economic growth to approach 6% this year

The International Monetary Fund is forecasting economic growth of nearly 6% this year due to demand and direct investment from abroad, as well as supportive policies. Mr. Paulo Medas, Head of the Vietnam team of the IMF, conducted a consultation and assessed that the Vietnamese economy is expected to grow by 5% in 2023 despite facing challenges. This growth is attributed to the government’s drastic policies aimed at addressing disturbances in the real estate market, financial stress, and a sharp decline in exports.

IMF experts predict that the economy will gradually recover from the end of 2023, supported by positive exports, tourism, and expansionary fiscal and monetary policies. It is forecasted that economic growth will recover to close to 6% in 2024, driven by strong external demand, stable foreign direct investment, and accommodative policies. However, risks remain high, particularly in terms of weakening exports, global geopolitical tensions, and domestic demand growth.

Inflation is expected to fluctuate around the State Bank’s target level of 4-4.5% this year, with exchange rate pressures potentially impacting domestic inflation under loose monetary conditions. The State Bank may need to tighten monetary policy if price pressures increase. Fiscal policy is also supporting economic growth in 2024, with efforts to boost public sector wages and public investment. Strengthening fiscal management and mobilizing budget revenue are key focuses for facing future challenges.

The regulatory agency has made important legal advances this year, particularly in the banking sector and real estate market. Amendments to laws around credit institutions and real estate aim to resolve legal bottlenecks and promote a healthy corporate bond market. Experts recommend strengthening supervision and management of financial institutions, restructuring weak real estate development enterprises, and increasing investment in infrastructure to support economic growth.