Illustrative image (Photo: VNA)Hanoi (VNA) – Vietnam’seconomic recovery is likely to be stronger at the end of the second quarter of2022 when the domestic demand and the tourism sector recover, according to StandardChartered Bank.
In its latest Vietnam-focused macro-economic research report, Standard Chartered forecasts Vietnam'srecovery will accelerate markedly in 2022, with GDPgrowing by 6.7 percent in the whole year when economic indicators arebeing recovered on a large scale.
Experts from StandardChartered said Vietnam remains a key manufacturing centre and link inthe global supply chain despite challengesrelated to geopolitical tensions and the COVID-19 pandemic.
However, they also notedthat the Southeast Asian nation may face short-term risks, especially those relatedto the tourism recovery and the COVID-19 pandemic.
According to TimLeelahaphan, Economistfor Thailand and Vietnam at Standard Chartered, the re-opening of the tourismsector, which accounts for 10 percent of Vietnam’s GDP, will be a factorthat needs to be observed and evaluated seriously in the second quarter of thisyear after two years of closure due to the pandemic.
FDI inflows into Vietnamhave begun to pick up this year after a slowdown in 2021.
The bank expects thistrend to continue, especially in the areas of electricity generation andsupply, petroleum and air conditioning equipment.
Foreign investors willcontinue to be the main driving force for Vietnam to contribute to the globalsupply chain, said Leelahaphan.
Many big technologyenterprises in the world have moved or planned to move their production fromChina to Vietnam in recent years in order to diversify their supply chains, hesaid, adding that Vietnam continues to be a regional manufacturing hub in termsof electronics, textiles and footwear.
Standard Chartered maintains its inflation forecast for Vietnam at 4.2percent for 2022 and 5.5 percent for 2023. The bank said that supply factorswill bring risks of increasing inflation, especially the current geopoliticaltension.
It also maintains its medium-term constructive view onthe Vietnamese dong (VND) amid expectations of a strong balance of payments(BoP).
Vietnam is likely tocontinue to run a current account surplus this year as the tourism sectorrecovers, despite higher commodity prices, it said.
The bank forecasts the USD-VND exchange rate at 22,300by end-2022, and 22,000 by the end off 2023.
Previously, experts fromthe Asian Development Bank (ADB) forecast that Vietnam's economy can expand by6.5 percent this year and grow stronger at 6.7 percent in 2023.
Meanwhile, Vietnam’s economic growth wasrespectively projected at 6.2 percent and 5.3 percent in 2022 by the Hong Kong & Shanghai Banking Corporation (HSBC) and the World Bank./.
