VinaCapital revises GDP growth forecast for Vietnam from 6.5% to 7.5%




Vietnam’s economy grew at 7.7 per cent year on year (YoY) in the second quarter (Q2) this year, which was one of the country’s fastest quarterly growth rates in a decade, driven by a dramatic acceleration in domestic consumption, according to Vietnamese investment management company VinaCapital, which has revised 2022 gross domestic product (GDP) growth forecast for the country from 6.5 per cent to 7.5 per cent.

VinaCapital believes it is possible that the GDP will grow by more than 7.5 per cent this year. GDP growth in Q3 is likely to exceed 10 per cent YoY as the COVID lockdowns in Q3 of 2021 resulted in a low base from which 3Q 2022 activity will be compared.

Vietnam’s economy grew at 7.7 per cent year on year in the second quarter this year, one of the fastest quarterly growth rates in a decade, driven by a dramatic acceleration in domestic consumption, according to Vietnamese investment management company VinaCapital, which has revised 2022 GDP growth forecast for the country from 6.5 per cent to 7.5 per cent.

A 10 per cent YoY GDP print for Q3 would be a major catalyst for investors to pour money into Vietnam’s stock market, with the only caveat to the very bright outlook for Vietnam’s GDP growth being the on-going slowdown in US GDP growth.

This slowdown in the US economy is weighing on demand for ‘made in Vietnam’ products such as TVs, furniture and smartphones, as can be seen in the latest consumer sentiment survey from the University of Michigan.

VinaCapital expects Vietnam’s export growth to the United States to fall to circa 10 per cent by the end of the year as the US economy continues to slow.

The growth of Vietnam’s manufacturing sector has decelerated from 11.6 per cent in H1 2021 to 9.7 per cent in H1 2022 as demand for ‘made in Vietnam’ goods started to soften.

Investors are focused on the global inflation wave currently sweeping across the globe, but inflation in Vietnam is still modest at just 3.4 per cent YoY at the end of June. The main driver of inflation in Vietnam is a surge in global oil prices, VinaCapital said in a release.

Fibre2Fashion News Desk (DS)





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