Vietnam’s GDP growth forecast to rank second in ASEAN

Vietnam’s GDP is projected to grow 5.8% this year. (Photo: VNA)

Vietnam’s GDP is projected to grow 5.8% this year, sharing the second position with Cambodia in the region, only after the Philippines, according to the International Monetary Fund (IMF).

Notably, Vietnam’s public debt is expected to stay at the lowest as compared with eight other ASEAN member countries, the fund said.

The fund also forecast that Vietnam’s GDP growth will rebound to 6.9% in 2024, the highest in Southeast Asia, and its public debt will fall to 31.3% of the national GDP in 2028 from the record 47.5% in 2016. The debt-to-GDP ratio in 2028 will be the lowest within two decades.

In terms of inflation, the lender said it will reach 5% and 3% in 2023 and 2024, respectively.

Over the past time, the State Bank of Vietnam (SBV) has constantly cut regulatory interest rates, paving the way for credit institutions to reduce their lending interest rates, thus spurring economic growth, said Dao Minh Tu, deputy governor of the SBV.

Illustrative image (Source: VNA)

Experts described the central bank’s reductions as flexible and timely, and expected that 12-month deposit interest rates will hover around 7% and lending interest rates, 10%.

The bank has substantial room to further loosen monetary policy this year, they said, noting that it will continue to cut policy rates by 50 basis points in the second quarter of this year.

Experts from the Bao Viet Securities JSC shared the view that the biggest pressure on interest rates last year came from the US Federal Reserve's continuous rate hikes, making the USD soar to a 20-year high.

Meanwhile, those from the United Overseas Bank (UOB) said the Vietnam’s GDP growth of only 3.32% in the first three months of this year, down from 5.92% in the last quarter of 2022, will prompt the central bank to further cut regulatory interest rates, and that the bank is likely to further relax policies in the time ahead./.