UOB lowers Vietnam’s GDP growth forecast in 2023 from 6.6% to 6%

DNHN - UOB's Global Markets and Economic Research has released Vietnam's Q1/2023 growth report to 6%, instead of 6.6%.

UOB Global Economics & Markets Research (UOB Global Economics & Markets Research) published the Vietnam Growth Report for the first quarter of 2023 on March 30, 2023.

In light of the likelihood that a relatively weak start to the first quarter of 2023 will depress full-year growth results, UOB reduces its GDP growth forecast for Vietnam for 2023 from 6.6% to 6%, while the Government's forecast remains at 6.5%.

Based on the most recent growth results and the State Bank of Vietnam's (SBV) efforts to strike a balance between promoting economic growth and maintaining price stability, UOB predicts that the SBV will likely be more inclined to loosen policies shortly. next. There are indications of a reversal in the domestic inflation rate, and the US Federal Reserve (Fed) is prepared to end its interest rate hike cycle by May 2023. UOB forecasts that the SBV will reduce the refinancing rate by 100 basis points to 5% sometime during the second quarter of 2023. UOB believes this could be a one-time move, with additional rate cuts possible if domestic inflation pressures ease, although this is currently highly uncertain.

Before this announcement, the General Statistics Office projected that the gross domestic product (GDP) in the first quarter of 2023 would increase by 3.32 percent over the same period the previous year, which was only 0.01% higher than the growth rate recorded in the first quarter of 2020 (up 3.21 percent) for the period 2011-2023.

Agriculture, forestry, and fishing accounted for 11.66% of the economic structure in the first quarter of 2023; industry and construction accounted for 35.47 %; the service sector accounted for 43.65 %; and product tax minus product subsidies accounted for 9.22 %.

According to the General Statistics Office, the service sector rebounded in the first quarter of 2023 due to the efficacy of policies to stimulate domestic consumption demand, policies to open the economy, and promotion and advertising activities. The promotion of Vietnamese tourism to countries around the globe is...

Statistics indicate that in the first quarter of 2023, the estimated total retail sales of consumer goods and services exceeded 1.5 trillion Vietnamese Dong, a 13.9% increase over the same period in the previous year. In addition, it is estimated that nearly 2.7 million international visitors arrived in our country during the first three months of the year, which is 29.7 times higher than the same period last year. Nonetheless, industry and construction - in the context of the general difficulty of the global economy, the primary driving force of the economy experienced a decline, the production of the number of key industries declined due to high input production costs, and the number of orders decreased. According to the General Statistics Office, the added value of industries decreased by 0.82 percent in the first quarter of 2023 compared to the same period the previous year.

The General Director of the General Statistics Office, Nguyen Thi Huong, stated, "This is the steepest decline over the same period of years from 2011 to 2023, reducing 0.28 percentage points from the increase in the total added value of the entire economy."

PV (t/h)