VINACHEM

Although the growth rate has slowed down in the context of global economic headwinds, Viet Nam is performing better than most countries in the world, and is considered an attractive destination for foreign direct investment (FDI) in the manufacturing sector.

This is an assessment by the International Monetary Fund (IMF) and DBS Bank - Singapore's leading multinational banking and financial services group on Viet Nam's economic situation in the first half of this year.

In the context that the world situation continues to be complicated, with internal difficulties, Viet Nam's Gross Domestic Product (GDP) in the first 6 months of 2023 only reached 3.72 percent, not as expected.
However, most experts consider this to be an appropriate growth rate in the general context of the global economy, and are optimistic about the recovery of Viet Nam's economy in the coming time.

Division Chief of the International Monetary Fund (IMF)'s Fiscal Affairs Department, Paulo Medas, commented that, like other countries, Viet Nam faced difficult and complicated external conditions, such as slowing global growth and increasing interest rates.

Nevertheless, a gradual easing of monetary policies, including lowering interest rates, cutting taxes and expanding public spending, has helped to mitigate the impact of "headwinds".

Accordingly, the IMF noted that Viet Nam's economic growth would recover in the second half of 2023, reaching about 4.7 percent for the whole year thanks to the recovery of exports and easing domestic policies.

Inflation is expected to be controlled below the State Bank of Viet Nam's 4.5 percent target. Viet Nam can return to high growth rates over the medium term, as structural reforms are implemented.

Additionally, with the total newly registered FDI capital in the first half of 2023 increasing by about 30 percent over the same period last year, DBS considers Viet Nam an attractive destination for FDI, thanks to the production shift trend, many FTAs, bright medium-term growth prospects and rising e-ecosystem.

Besides, head of ASEAN Consulting at Dezan Shira & Associates, Marco Förster, predicted that Viet Nam would experience rapid economic growth in the medium term. This is because of its emerging status as a leading manufacturing hub in Southeast Asia, a highly educated population and rising capital investment.

Sharing the same view, credit rating agency S&P Global Ratings said that a young, increasingly highly educated and highly competitive workforce was the main attraction for foreign investors.

In "OECD Economic Report: Vietnam 2023", the Organization for Economic Cooperation and Development (OECD) forecasted that Viet Nam's economy would grow at a solid 6.5 percent in 2023 and 6.6 percent in 2024.

In the field of tourism, the Google Destination Insights report shows that Viet Nam is the 7th most searched destination in the period from March to June and the only country in Southeast Asia to make the top 20.

With a competitive workforce, and high capital investment, Viet Nam still has room to implement measures to promote growth and the prospect of economic recovery in the last months of the year is positive./.    – VGP –