[NEWS] - Vietnam’s recovery momentum will be stronger in Quarter 2

Based on a report by Standard Chartered, Vietnam is still a leader in production and also an important link in the global supply chain despite challenges related to geopolitical tensions and epidemics.

In its macroeconomic report on Vietnam titled “Vietnam – recovery will be stronger in the second quarter,” Standard Chartered Bank maintained its forecast for Vietnam’s economic growth (GDP) at 6, 7% in 2022 when economic indicators have seen a broad-based recovery. 

The report also stated that the economic recovery process is likely to be stronger at the end of the second quarter when domestic demand and the tourism sector recover. 

Mr. Tim Leelahaphan, economist in charge of Thailand and Vietnam, Standard Chartered Bank shared: “The government has lifted the quarantine regulations for international visitors to Vietnam since mid-March. We believe that the opening of the tourism sector, which contributes 10% of GDP, will be a factor that needs to be observed and evaluated closely in the second quarter of this year after 2 years of closure due to the epidemic. 

“Foreign investors will continue to be the main driving force for Vietnam to contribute to the global supply chain. Many large technology enterprises in the world have moved or plan to move production from China to Vietnam in recent years in order to diversify their supply chains. Vietnam continues to be a regional manufacturing hub in areas such as electronics, textiles and footwear,” added Mr. Tim Leelahaphan.

Standard Chartered Bank maintains its inflation forecast for Vietnam at 4.2% for 2022 and 5.5% for 2023. Supply factors will bring risks of increasing inflation, especially especially the current geopolitical tension.

For Vietnam dong, Standard Chartered also continued to give a positive assessment. Vietnam is likely to continue to run a current account surplus this year as the tourism sector recovers, despite higher commodity prices. The bank predicts that the USD/VND exchange rate will reach VND 22,300 by the end of 2022 and VND 22,000 by the end of 2023.

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Cao Duy