Vietnam likely to achieve GDP growth target of 8% this year: UOB expert
VOV.VN - Vietnam is likely to secure high annual growth of 8%, or even double-digit growth after recording a 7% expansion last year, according to Suan Teck Kin, head of research and executive director of Global Economics and Markets Research at Singapore-based United Overseas Bank (UOB).
The economist made the assessment, referring to similar examples in Singapore and China, but said there are two key factors that would affect Vietnam's economic growth in 2025 and the 2026-2030 period - risks from US tariff policies and the need to boost public investment.
Kin noted that Vietnam is largely dependent on international trade, with exports accounting for 90% of the country’s GDP, the second highest in ASEAN after Singapore with 174%.
In addition, the US is Vietnam’s largest export market, making up 30% of its total export turnover. If the US imposes tariffs on Vietnamese goods, the manufacturing and service sectors would be significantly affected.
Export demand may decline due to a slowdown in global economic activity, thus impacting GDP growth. The semiconductor cycle is also weakening, affecting the country’s high-tech exports. FDI inflows may slow down, as investors consider shifting to countries less likely to face US tariffs.
To obtain the 8% growth goal, the UOB economist suggested that Vietnam boost public investment to support growth and to cushion declines from export and manufacturing activities. In his analysis, the country faces a significant infrastructure gap, while capital formation expenditure accounts for only 30% of GDP, much lower than China’s 41%.
The government is advised to increase public spending instead of being overly cautious about reducing the public debt-to-GDP ratio (currently 35%, targeted to drop to 31% by 2029).
Another solution, according to the economist, is to accelerate public investment disbursement. In his view, it’s encouraging news that the National Assembly has recently approved an US$8 billion railway project connecting China and Vietnam, and fast-tracked the North-South Expressway expansion. The government is investing heavily in AI/data, energy, and water resources to support sustainable long-term growth.
UOB ups Vietnam’s 2024 GDP growth forecast to 6.4%
VOV.VN - Despite the impact of Typhoon Yagi on business operations, Singapore-based United Overseas Bank (UOB) has raised its GDP growth forecast for Vietnam this year to 6.4% from its 5.9% projection about two weeks ago.
