Hanoi (VNA) – Although Vietnam’s growth hasslowed down amid global economic crises, the country is showing strongerperformance than the majority of others in the world and continuing to be anattractive destination for foreign manufacturers, according to insiders.

Amid the complicated developments in the world economy anddomestic headwinds, Vietnam’s GDP growth in the first six months of thisyear reached only 3.72%, which was below expectations.

However, many of experts held that this was asuitable growth rate in the current situation, and showed their optimism aboutthe country’s economic recovery in the time to come.

Head of the International Monetary Fund (IMF) 2023 ArticleIV Mission to Vietnam Paulo Medas commented that like others in theworld, the Vietnamese economy was further hit by a sharp deterioration inexternal demand since late 2022, with exports declining by 12% in the firstfive months of 2023. Liquidity and inflationary pressures have eased recently,but growth slowed down significantly in the first half of 2023, he said.

Vietnam’s economic growth is projected to recover in thesecond half of 2023, reaching around 4.7% for the year, supported by a reboundin exports and expansionary domestic policies. Inflation is expected to be contained below the SBV’s 4.5% ceiling. Over the medium term, Vietnam canreturn to high growth rates as structural reforms are implemented, the expertcommented.

In the short term, downside risks to growth remain large, he held, stressingthat that further efforts to safeguard macro-economic and financial stabilityand accelerate reforms will ensure that the economy remains on a safe footing. The policy mix should be re-balanced with greater emphasis on fiscalsupport to the economy and the most vulnerable.

Achieving Vietnam’s ambitious development and climateobjectives will require accelerating reforms to improve the businessenvironment, critical infrastructure, and invest in education, he stated.

Meanwhile, Singapore’s DBS Bank Limited noted that in the first half of 2023,the amount of foreign direct investment (FDI) poured to Vietnam rose about 30%,commenting that it is still an attractive destination for investors thanks tothe production transition trend, free trade agreements it has signed,and its high middle-term economic outlook at 6-7% as well as the growingelectronic ecosystem.

The FDI inflows showed that foreign investors’ confidence in the long-termpotential of Vietnam has maintained.

The bank said it believes that in the second half of thisyear, Vietnam’s exports will increase again along with the recovery of theworld electronics sector, while domestic services and tourism sector willcontinue to thrive and support the country’s economy.

Marco Förster, head of ASEAN advisory at Dezan Shira &Associates, a consultancy firm, said that despite the current difficulties,Vietnam is predicted to experience rapid economic growth in the medium term dueto its emerging position as a leading manufacturing hub in Southeast Asia, itswell-educated population, and increased capital investment.

S&P Global Ratings forecast that the Vietnamese economy will recover in thenext 24 months as global demand picks up and Vietnam gradually tackles domesticchallenges.

Meanwhile, in a recently-released report, the OECD predicted that the Vietnameseeconomy will post a 6.5% growth in 2023 and 6.6% in 2024./.