Vietnam’s GDP growth expected to recover to 5.5 per cent by fourth quarter of 2021

Busy Hanoi street pre Covid  (File photo)

Standard Chartered forecasts fourth-quarter growth in Vietnam at 5.5 per cent.

The bank sees downside risks to the forecast – and a potential interest rate cut – if the economic impact of Vietnam’s COVID-19 outbreak is prolonged. Such a scenario could affect Vietnam’s external position.

According to Standard Chartered, GDP growth in the third quarter may likely have slowed to 1.9 per cent on-year, from 6.6 per cent in the second quarter, as the pandemic hit the economy.

Earlier this month, the bank had revised its GDP growth forecasts for Vietnam for 2021 to 4.7 per cent from 6.5 per cent and 7.0 per cent from 7.3 per cent for 2022 due to softening economic indicators, the worsening pandemic, and a still-slow vaccination rollout, according to vietnaminsider.vn.

Standard Chartered anticipates a further downgrade and an interest rate cut by the State Bank of Vietnam if COVID-19 cases are not brought under control by September.

It sees a rebound in the fourth quarter and expects trade data to remain supported by improving global trade. Softer economic growth is expected in the third quarter of this year, according to Standard Chartered.

FDI inflows into Vietnam reaches US$22.15 billion the first nine months despite Covid-19’s impacts.

Foreign investment inflows into Vietnam during the first nine months of this year rose 4.4 percent year-on-ear to US$22.15 billion despite the impact of COVID-19, according to the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment. 

Up to 1,212 foreign-invested projects were licensed with a total registered capital of $12.5 billion in the period, down 37.8 per cent in the number of projects but up 20.6 per cent in value over the same period last year.

Meanwhile, 678 operating projects were allowed to raise their capital by $6.6 billion, a year-on-year rise of 25.6 per cent in capital but down 15.8 per cent in project number, Vietnam News citing a report from FIA.

Capital contributions and share purchases by foreign investors stood at nearly $3.2 billion, down 43.8 per cent from the same period last year, according to FIA.