Shrimp processing at Minh Phú Seafood Corp. The export sector is critical for growth and it’s likely to turn around next year. — VNA/VNS Photo

HÀ NỘI — The ASEAN+3 Macroeconomic Research Office (AMRO) has just revised the growth forecast for Việt Nam’s economy in 2023, increasing it to 4.7 per cent from the previous 4.4 per cent stated in the July report.

In the October quarterly update, only three economies in the ASEAN+3 region, encompassing 10 ASEAN countries and China, Japan, and South Korea, saw upward revisions. Alongside Việt Nam, Japan's 2023 GDP growth was adjusted upward to 1.9 per cent from 1.4 per cent, and Brunei Darussalam rose to 1.1 per cent from 1 per cent.

The overall growth forecast for the ASEAN+3 region in 2023 is 4.3 per cent, down from the 4.6 per cent projection in July. This decline is primarily attributed to weaker-than-expected growth in China during the second quarter. China's economic growth in 2023 is now projected at 5 per cent, down from the 5.5 per cent forecast in the previous report.

AMRO's chief economist, Hoe Ee Khor, noted the significance of China as a major trading partner for the region, affecting not only trade but also tourism and investment. Weaker-than-expected recovery in China may impact imports from the region, particularly concerning intermediate goods used in China's production exported to the US and EU. Khor highlighted the need of the recovery in the US and Europe for China's trade improvement.

AMRO's GDP growth forecast for ASEAN+3 economies in 2023 and 2024. — Photo AMRO

Looking ahead to 2024, AMRO anticipates the ASEAN+3 region to expand by 4.5 per cent, expecting the impact of China's policy support measures to fully boost domestic demand. This, coupled with the gradual increase in durable goods consumption in the United States and the anticipated recovery of the global technology cycle, is expected to bolster regional exports despite expected weaknesses in the global economy.

Challenges in Việt Nam

Despite the upward adjustment in the forecast for Việt Nam's 2023 GDP growth, AMRO's projection falls below those of other international organisations such as ADB (5.8 per cent), UOB (5.2 per cent), and Standard Chartered Bank (5.4 per cent). This discrepancy indicates significant challenges for Việt Nam in achieving its annual growth target of 6.5 per cent for the current year.

Last week, the Ministry of Planning and Investment presented its latest growth projections for both the fourth quarter and the entirety of 2023. The most optimistic scenario anticipates a 6 per cent economic growth for the entire year, necessitating a 10.6 per cent increase in the fourth quarter. The second scenario envisions a 5.5 per cent economic growth in 2023, with an 8.8 per cent increase required in the fourth quarter. The least favourable scenario involves a 5 per cent growth, demanding a 7 per cent increase in the fourth quarter.

Khor said the Vietnamese Government has taken various measures, using both fiscal and monetary tools, to provide relief to enterprises hit by the downturn by slashing interest rates, deferring tax payments, and restructuring loans.

“It takes a bit longer to recover, but the export sector is very critical and it’s likely to turn around next year. When the demand picks up, enterprises will recover and the economy will grow,” Khor said.

AMRO forecasts that Việt Nam's GDP growth in 2024 will attain 6 per cent. Inflation is comfortably within the Government's target, estimated at 3.3 per cent in 2023 and 3.4 per cent in 2024. — VNS