Headwinds are strengthening for Vietnam in the last quarter this year, and key economic indicators have shown weakening global demand for the country’s exports, according to Asian Development Bank (ADB) country director in Vietnam Andrew Jeffries, who recently said manufacturing purchasing managers index (PMI) in the country dipped to 47.4 in November from 50.6 in October.

He, however, attributed Vietnam’s economic growth in 2022 to a strong performance across sectors.

Policy responses for the country need to strike a dedicated balance among curbing inflation and maintaining economic growth, and also ensuring the stability of the financial sector, he advised.

For monetary policy, he suggested that maintaining price stability should be the primary focus, and Vietnam’s monetary stance should continue to be vigilant of inflation in 2023. Further policy rate hikes may still be warranted in 2023 if inflation picks up, he said.

There should be greater and more efficient coordination between the fiscal and monetary policies, he told the Vietnam Economic Forum in Hanoi.

Vietnam’s economy expanded by 8.8 per cent in the first three quarters this year. Its exports grew by 13 per cent year on year (YoY) and imports expanded by 10 per cent YoY, resulting in a trade surplus of $10.6 billion in the first 11 months of 2022, he was quoted as saying by a news agency.

Disbursements of foreign direct investment increased by 7.8 per cent YoY, estimated at $7.7 billion, the highest disbursement in five years. Domestic consumption in November was up by 2.6 per cent from the previous month and up by 17.5 per cent over the same period last year, the ADB official said.

Employment was also down due to declined economic activities, he said, pointing out that recent monetary tightening, irregularities in the corporate bond market and slow disbursement of public investment tightened liquidity for economic recovery.

Fibre2Fashion News Desk (DS)

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