S&P Global increases Vietnam’s GDP growth projection to 6.2% for 2024.

In a recent update, S&P Global, a leading market intelligence firm based in the U.S., has raised its economic growth forecast for Vietnam in 2024 to an impressive 6.2%. This revision reflects an upward adjustment from the previous 5.8% projected in June, marking Vietnam as one of the most robust emerging economies in the region, trailing only behind India, which is anticipated to achieve a growth rate of 6.8%.

This positive outlook is especially noteworthy within the context of Southeast Asia, where S&P Global forecasts average growth close to 5.0% over the next few years, up from just 4.4% in 2023. Factors driving this growth include resilient domestic demand and a cautious approach to monetary easing anticipated in several countries across the region.

Moreover, tourism in Southeast Asia is experiencing a rebound, and electronic exports are on an incline—though both elements remain intricately tied to the performance of the global economy. As emphasized by S&P Global, the electronics sector is pivotal to several Southeast Asian nations, with Vietnam recording a noteworthy 10% growth in manufacturing output year-on-year for the first half of 2024. However, the industry is cyclical and could experience fluctuations depending on global demand.

Further projections from S&P Global depict a steady trajectory for Vietnam’s economic growth, estimating GDP growth to be 6.8% in 2025, 6.7% in 2026, and 6.6% in 2027. Regarding inflation, the forecast stands at a moderate 3.6% for this year, remaining below Vietnam’s target range of 4-4.5%, and dropping further to 3.1% by 2025.

In September, Singapore-based United Overseas Bank (UOB) revised its GDP growth forecast for Vietnam down by 0.1 percentage points to 5.9% for this year, citing damage from super typhoon Yagi.

Meanwhile, the Asian Development Bank (ADB) has maintained its forecast for Vietnam’s growth at 6% in 2024.

Notably, super typhoon Yagi is estimated to potentially reduce Vietnam’s GDP growth by between 0.16 and 0.45 percentage points, according to experts from Mitsubishi UFJ Financial Group (MUFG), one of Japan’s leading banking institutions.

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This evolving narrative surrounding Vietnam’s economic growth highlights the opportunities and challenges faced by the country. The interplay between domestic consumption, external economic conditions, and natural disasters will undoubtedly shape the trajectory of Vietnam’s economy in the coming years. As analysts and stakeholders monitor these trends, Vietnam’s position as a burgeoning economic player in Southeast Asia becomes increasingly clear.