Positive economic outlook predicted for Vietnam in H2

Standards Chartered forecast the Vietnamse economy will grow 7% in H2. (Photo: hanoimoi.com.vn)

Hanoi (VNA) –International organisations and media have continued to make positive assessmentof Vietnam’s economic recovery and outlook in the second half of 2023.

Despite a slow growth amid global economic headwinds, Vietnam is performing better than mostcountries and is still an attractive destination for foreign direct investment(FDI) in the manufacturing sector, according to the International Monetary Fund(IMF) and Singapore-based DBS Bank as cited by Fibre2Fashion.

In an assessment ofVietnam’s economic situation in the first half of this year, both said a gradual easing ofmonetary policies, reducing taxes, and expanding public spending have helpedmitigate the impact of headwinds.

The IMF notedthat Vietnam's economic growth would recover in H2 while inflation is likely tobe under control below the State Bank of Vietnam's 4.5% target.

Meanwhile, Standards Chartered expectedthe economy to grow 7% in H2.

The country'seconomic stability and openness are key drivers for its promising mid-termoutlook, a continued recovery of tourist arrivals will help strengthenthe services balance, while maintaining investment inflows might need anenhanced global environment and concerted efforts from the Vietnamese Government,the bank said.

Sputnik News of Russia cited DBS Bankas saying that with the FDI registered in H1 increasing about 30% year on year,despite many challenges, Vietnam is still an attractive FDI destination thanksto the shift in supply chains, many free trade agreements, a medium-term growthoutlook of 6 - 7%, and a developing electronics ecosystem.

It noted the surge in FDI inflowsinto the manufacturing sector this year reflects foreign investors’ sustained confidencein Vietnam’s long-term potential.

Vietnam is said to remain an attractive FDI destination. (Photo: VNA)

According to AsiaBusiness Outlook of India, Vietnam is one of the fastest-growing digital economiesin Southeast Asia. Against this backdrop, strong governmental support such ascompetitive tax incentives coupled with Vietnam’s skilled labour market haveplayed a strong role in enabling the country to serve as an offshoremanufacturing hub as businesses look to diversify and strengthen their supplychains.

Vietnam is a country on the rise, with a growing economy, stablepolitical environment, and a relatively young workforce, making it anattractive destination for businesses looking to expand their operations inAsia.

“As Vietnamcontinues to develop and grow, we can expect to see an increase in foreigninvestment and opportunities for businesses looking to tap into this dynamicand exciting market,” an article on AsiaBusiness Outlook wrote.

Technode Global cited Tracxn Technologies Ltd. as saying in a recentstatement that the Vietnamese techstartup ecosystem has emerged as the third-highest funded startup ecosystem inSoutheast Asia.

The startupecosystem of Vietnam holds significant potential for growth, thanks to thecountry’s government support measures such as tax exemptions for informationtechnology (IT) companies and land rent concessions. The government’scommitment to establishing a cashless economy will contribute to thedevelopment of the FinTech ecosystem in the region, Tracxn added./.

VNA