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ADB: Vietnam's GDP growth forecast in 2023 is only 5.8%

Economic growth of the whole year reaching 6.5% is not feasible in the context that market demand has not increased and foreign orders have not changed much. Photo: Minh Duy

ADB's Asian Development Outlook for July 2023, published on July 19, said that ADB maintains the growth outlook for developing economies in Asia and the Pacific at 4 .8% this year, as strong domestic demand continues to support the region's recovery.

Inflation is expected to continue to decline, approaching pre-pandemic levels as fuel and food prices fall. The forecast for inflation in developing Asia is 3.6% this year, compared with the 4.2% forecast in April. Meanwhile, the inflation forecast for 2024 is raised to 3.4% compared with the previous estimate of 3.3%.

China's reopening is boosting growth in the region, so the ADB forecasts China's economy will grow 5% this year, unchanged from its April forecast, amid strong domestic demand in the service sector.

However, export demand for electronics and other manufactured goods from developing Asia is slowing, as tight monetary policy leads to a slowdown in economic activity in advanced economies mainstream development. The region's growth forecast for 2024 was revised down slightly to 4.7% from the 4.8% forecast in April.

ADB Chief Economist Albert Park said that Asia and the Pacific are continuing to recover from the pandemic at a steady pace. Domestic demand and service activity are fueling growth, while many economies are also benefiting from a strong tourism recovery. However, industrial activity and exports remain weak, leading to a weaker outlook for growth and global demand next year.

It is notable that ADB kept its growth forecast for most of the Asia and Pacific sub-regions but revised down its growth forecast for Vietnam in 2023 from 6.5% to 5.8% and from 6.8% to 6.2% in 2024. The cause was pointed to weak external demand that continues to put pressure on industrial production and manufacturing, while domestic conditions is expected to be improved. Inflation is forecast to slow to 4% in 2023 and 2024 domestic is expected to improve. Inflation is forecast to slow to 4% in 2023 and 2024.

Assessing the growth rate in the first 6 months of the year and prospects for the next few months, the Director General of the General Statistics Office said, according to the growth scenario set out in Resolution No. 01/NQ/CP dated on 6th January 2023 by the Government, in order to achieve the target of 6.5% growth for the whole year, the first 6 months of the year need to achieve an increase of 6.2% (in which the first quarter increased by 5.6%, the second quarter increased by 6.7%). %).

However, the real GDP growth in the first six months of the year only reached 3.72% (of which the first quarter increased by 3.28%, the second quarter increased by 4.14%), did not reach the set increase, even much lower compared with the plan (2.48 percentage points lower). In which, it is mainly due to industries with a growth rate of added value of only 0.44%, especially the processing and manufacturing industry with only a modest growth rate with an estimated increase in value of 6 months. 0.37%; mining industry decreased by 1.43%; Exports of processed and manufactured industrial products (such as electronic components, textiles, footwear, etc.) declined, much lower than the growth rate of the same period in 2022 due to a shortage of foreign orders for processing and manufacturing industrial products for processing and manufacturing in Vietnam.

Therefore, it is difficult for the whole year economic growth to reach 6.5% in the context that market demand has not increased and foreign orders have not had many clear changes when the world economy has many problems. There are potential risk factors so world consumer demand is still weak and difficult to forecast.