Shrimp processed for export at a Minh Phú Group facility. Several international institutions have lowered Việt Nam’s economic growth forecast to between 6 and 6.2 per cent in 2025 on global policy uncertainty. — VNA/VNS Photo Vũ Sinh

HÀ NỘI  — Several international institutions have lowered Việt Nam’s economic growth forecast from around 7 per cent to between 6 and 6.2 per cent in 2025, due to global policy uncertainty and slowing exports on escalating trade tensions.

The Organisation for Economic Co-operation and Development (OECD) forecast Việt Nam’s economic growth at 6.2 per cent this year and 6 per cent next year. 

Despite the downward revision, Việt Nam remains among the economies with the most positive prospects in the year ahead, with a forecast still significantly higher than for other countries in the region, driven by robust private consumption and public investment, according to the OECD.

However, a volatile global trade environment is expected to weigh on overall momentum.

Việt Nam's fiscal policy would continue to support growth through hastening public investment, the OECD said, warning of emerging inflation pressure that might prompt a shift to a more neutral fiscal setting. 

The State Bank of Việt Nam maintained an expansionary monetary policy from June 2023, including rate cuts and credit growth targets. While this was expected to continue, the OECD urged a close watch on inflation risk stemming from planned hikes in pensions and minimum wages.

Meanwhile, in a recent report about the Vietnamese economy, Singapore-based United Overseas Bank (UOB) pointed out that the Vietnamese đồng had depreciated notably since the US announced new reciprocal tariff measures in early April.

The State Bank of Việt Nam would consider loosening monetary policies, but the depreciation of the Vietnamese đồng remained a concern.

UOB expects the central bank to hold its refinancing rate steady at 4.5 per cent. A return to pre-pandemic rates of 4 per cent or lower would be possible if the labour market weakens and the forex exchange market stabilises, UOB noted.

The bank also lowered Việt Nam’s growth forecast to 6 per cent in 2025, down from an earlier projection of 7 per cent. — VNS