ADB: Vietnam's economic growth slows due to weak external demand

09/27/2023 11:29 Nhat Linh Print article

ANTD.VN - The Asian Development Bank (ADB) forecasts Vietnam's economic growth will slow to 5.8% in 2023 and 6.0% in 2024, compared to its April 2023 forecast of 6.5% and 6.8%, respectively, mainly due to weakening external demand.

The Asian Development Outlook (ADO) September 2023 report noted that key factors impacting the economy include the global economic slowdown, monetary tightening in some developed countries, and disruptions due to rising global geopolitical tensions.

Inflation forecasts were revised down from 4.5% to 3.8% for 2023 and from 4.2% to 4.0% for 2024.

ADB press conference to release Asian Development Outlook (ADO) Report September 2023

At a press conference this morning, Mr. Shantanu Chakraborty, ADB Country Director for Vietnam shared: “The weak external environment, including the slow recovery in China, has negatively affected Vietnam’s export-oriented manufacturing sector, shrinking industrial production.

However, the economy remains resilient and is expected to recover rapidly in the near future thanks to strong domestic consumption, supported by moderate inflation, accelerating public investment disbursement and improving trade activities.”

While Vietnam’s industrial production shrinks due to weak global demand, other sectors are forecast to grow healthily. The services sector is expected to continue expanding thanks to a revival in tourism and a recovery in related services. Agriculture will benefit from rising food prices, and is expected to grow by 3.2% in 2023 and beyond.

The report also highlights significant risks to this outlook. Domestically, slow disbursement of public investment and structural weaknesses in the economy pose key risks to growth.

Externally, a sharp slowdown in global growth and a weak recovery in China remain risks to the economic outlook. Remaining high interest rates in the US and Europe, coupled with a stronger US dollar, could further complicate the recovery in external demand and lead to depreciation of the dong.

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