IMF, DBS Bank optimistic about Vietnam's economic recovery in H2 2023

18 Jul '23

2 min read

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Despite a slow growth rate amid global economic headwinds, Vietnam is performing better than most countries and is still an attractive destination for foreign direct investment in the manufacturing sector, according to the IMF and DBS Bank.
IMF said Vietnam's economic growth—3.72 per cent in the first half this year—would recover in the second.

Despite a slow growth rate amid global economic headwinds, Vietnam is performing better than most countries and is still an attractive destination for foreign direct investment (FDI) in the manufacturing sector, according to the International Monetary Fund (IMF) and Singapore-based DBS Bank.

In an assessment of Vietnam’s economic situation in the first half (H1) this year, both said a gradual easing of monetary policies, reducing taxes and expanding public spending has helped mitigate the impact of headwinds.

The country’s gross domestic product (GDP) in H1 2023 was 3.72 per cent, not as expected. But most experts consider this to be appropriate and are optimistic about recovery, the assessment said.

IMF noted that Vietnam's economic growth would recover in H2 2023, reaching about 4.7 per cent for the whole year, a Vietnamese media outlet reported.

Inflation is likely to be under control below the State Bank of Vietnam's 4.5 per cent target. Vietnam can return to high growth rates over the medium term, as structural reforms are implemented.

With the total newly registered FDI capital in H1 2023 rising by about 30 per cent over the same period last year, DBS considers the country an attractive FDI destination because of production shift trend, many free trade agreements, bright medium-term growth prospects and rising e-ecosystem.

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