Shrimp processing at Minh Phu Seafood Corp (Photo: VNA) In the October quarterly update, only three economies in theASEAN+3 region, encompassing 10 ASEAN countries and China, Japan, and theRepublic of Korea (RoK), saw upward revisions. Alongside Vietnam, Japan's 2023GDP growth was adjusted upward to 1.9% from 1.4%, and Brunei Darussalam rose to1.1% from 1%.
The overall growth forecast for the ASEAN+3 region in 2023 is 4.3%,down from the 4.6% projection in July. This decline is primarily attributed toweaker-than-expected growth in China during the second quarter. China'seconomic growth in 2023 is now projected at 5%, down from the 5.5% forecast inthe previous report.
AMRO's chief economist, Hoe Ee Khor, noted the significance ofChina as a major trading partner for the region, affecting not only trade butalso tourism and investment. Weaker-than-expected recovery in China may impactimports from the region, particularly concerning intermediate goods used inChina's production exported to the US and EU. Khor highlighted the need ofthe recovery in the US and Europe for China's trade improvement.
Looking ahead to 2024, AMRO anticipates the ASEAN+3 region toexpand by 4.5%, expecting the impact of China's policy support measures tofully boost domestic demand. This, coupled with the gradual increase in durablegoods consumption in the US and the anticipated recovery of the globaltechnology cycle, is expected to bolster regional exports despite expectedweaknesses in the global economy.
Challenges in Vietnam
Despite the upward adjustment in the forecast for Vietnam's 2023GDP growth, AMRO's projection falls below those of other internationalorganisations such as ADB (5.8%), UOB (5.2%), and Standard Chartered Bank (5.4%).This discrepancy indicates significant challenges for Vietnam in achieving itsannual growth target of 6.5% for the current year.
Last week, the Ministry of Planning and Investment presented itslatest growth projections for both the fourth quarter and the entirety of 2023.The most optimistic scenario anticipates a 6% economic growth for the entireyear, necessitating a 10.6% increase in the fourth quarter. The second scenarioenvisions a 5.5% economic growth in 2023, with an 8.8% increase required in thefourth quarter. The least favourable scenario involves a 5% growth, demanding a7% increase in the fourth quarter.
Khor said the Vietnamese Government has taken various measures,using both fiscal and monetary tools, to provide relief to enterprises hit bythe downturn by slashing interest rates, deferring tax payments, andrestructuring loans.
“It takes a bit longer to recover, but the export sector is verycritical and it’s likely to turn around next year. When the demand picks up,enterprises will recover and the economy will grow,” Khor said.
AMRO forecasts that Vietnam's GDP growth in 2024 will attain 6%.Inflation is comfortably within the Government's target, estimated at 3.3% in2023 and 3.4% in 2024./.
VNA
