| Non-well fore for Vietnams economic growth |
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6/7/2023 3:57:56 PM Weak external demand, lack of orders, affected industrial output from January to May of Vietnam - the main export hub for electronics, textiles, footwear and furniture, including all the leading brands in the world. Most recently, Oxford Economics has lowered its forecast for Vietnam’s 2023 GDP growth from 4.2% to 3%. This is the lowest level set by a Western institution for this 2023 Vietnam economic forecast. Forecast of the lowest scenario of Vietnam’s economyWith the latest announcement, Oxford Economics is currently the organization that gives the lowest forecast of Vietnam’s GDP growth this year.
Oxford Economics’ forecast is also the worst compared to other international organizations such as IMF, OECD, ADB, WB, HSBC or Standard Chartered.
According to information from the Ministry of Planning and Investment , in the two years 2023 - 2024, the Organization for Economic Cooperation and Development (OECD) forecasts Vietnam’s growth rate at 6.5% and 6.6%.
Meanwhile, ADB forecasts 6.5% and 6.8%; IMF forecasts growth of 5.8% and 6.9%; The WB forecasts an increase of 6.3% and 6.5%.
Vietnam’s exports in the first five months of this year fell 11.6% year-on-year to $136.17 billion as weak external demand weighed on the manufacturing-based economy.
The General Statistics Office (GSO) said that Vietnam’s industrial output in the January-May period fell 2% from a year earlier, while the average consumer price index (CPI) in this period was up 3.55% from a year earlier.
The latest data shows that the economic growth rate of Vietnam, an important manufacturing hub for the region, has been severely impacted by falling global demand.
Imports in the first five months of this year fell 17.9% year-on-year to $126.37 billion, resulting in a trade surplus of $9.8 billion, the General Statistics Office said.
A sharp drop in imports may indicate that industrial production will continue to slow down as businesses reduce their purchases of raw materials and equipment.
Vietnam is a major exporter of electronics, textiles, footwear and furniture, including world-leading brands.
Deputy Prime Minister Le Minh Khai in early May said the economy would face adverse external conditions in 2023.
Vietnam has set a GDP target of 6.5% this year, slower growth than 8.02% growth in 2022.
Vietnam’s GDP growth slowed to 3.3% in the first quarter from 5.9% in the fourth quarter of last year.
Notably, Oxford Economics on Monday said it had cut its 2023 GDP growth forecast for Vietnam from 4.2% to 3.0%.
"We believe that global growth has slowed down, in which the recovery momentum is weaker than expected in China , which means that Vietnam’s export prospects are still difficult and gloomy, clouding the prospect of growth recovery. GDP", - Oxford Economics emphasized. The General Statistics Office said that exports of smartphones, Vietnam’s largest and main export item, fell 16% in the January-May period to $21.17 billion.
The General Statistics Office also noted that in May, Vietnam’s total exports fell by 5.9% from a year earlier, while imports fell by 18.4%.
Demand remains weakMaybank Securities Company Limited (MBKE) recently also lowered its GDP growth forecast in 2023 to 4% (from 5.5% previously).
Exports are likely to continue to decline in the second half of the year although a modest recovery in the fourth quarter is likely to benefit from low comparability. Demand from the US and EU is likely to remain weak due to slowing growth and rising retailers’ inventories.
Exports to China may be undermined by a dismal global demand outlook (as upstream inputs account for the majority of shipments to China) and China’s recovery on services, which are less more import.
MBKE stressed that a recovery in tourist arrivals will not be enough to support growth, given that Vietnam’s economy is highly export-oriented.
Analysts forecast growth in the second quarter of about 3% as the economy is still affected by the drop in exports and difficulties in real estate continue.
FlourishesFor the whole year economic growth to reach 6.5%, in the remaining 9 months of 2023, Vietnam’s economy needs to grow about 7.5%.
Previously, the leader of the Statistics Office once said that the trend of Vietnam’s economic growth is usually low in the first quarter, gradually increasing in the second quarter, then breaking out in the second half of the year. In 2023, Vietnam’s economy can still follow this trend.
As Sputnik reported, at the Government’s regular meeting in May, Minister of Planning and Investment Nguyen Chi Dung said that production and business in May improved.
Vietnam’s index of industrial production (IIP) increased by 2.2% over the previous month, of which the processing and manufacturing industry was estimated to increase by 2.9%. Newly registered foreign investment capital (FDI) reached nearly 2 billion USD, 2.2 times higher than the same period last year.
In the coming time, Vietnam has many prospects to improve its growth rate by promoting public investment, consumption, and tourism; green transformation, taking advantage of the trend of shifting foreign investment flows.
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