07 Jul 2022
Vietnam is forecast to come second to the Philippines in regard to forecast GDP for 2022, and on top for next year, as per the latest Quarterly Update of the ASEAN+ 3 Regional Economic Outlook.
A growth rate of 6.3% is predicted in Vietnam this year and 6.5% in 2023, exceeding the region-wide figures of 4.3% and 4.9% respectively.
However, Vietnam’s growth figures were downwardly revised to reflect lower growth predictions in major trading partners, the U.S. and China. Vietnam was forecast to be at the top of the list with 6.5% and 7.0% growth in the April report.
“Vietnam is a much more open economy and very exposed to the U.S. and Chinese economies. Because we are expecting reductions in growth rates in these countries and the expected slowdown would affect its external demand, we have to shift down projected growth rates for Vietnam," said Hoe Ee Khor, chief economist of the ASEAN+3 Macroeconomic Research Office (AMRO).
In addition, regional inflation is forecast fall to 2.8% next year, and AMRO forecasts Vietnam’s inflation figures will be 3.5% in 2022 and 3.3% in 2023.
"Vietnam has a fiscal base to be able to keep prices down and afford subsidies for now. At the same time, it can also use fiscal policy to stimulate the economy. There is a need for infrastructure investments in the country, so it can pump prime the economy to make domestic demand stronger," the chief economist went on to say.
A steeper decline in consumption in China would weigh heavily on the economy, AMRO stated, further impacting the regional outlook.