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12 Oct 2023

International Economy

Vietnam’s economy projected to grow 4.8-5.0% in 2023, lower than its government’s target of 6.0% (Business Brief No.4020)

คะแนนเฉลี่ย

        We at KResearch project that Vietnam's GDP growth will surge to 6.3-7.0 percent during 4Q23, thus allowing for its overall economy to expand at 4.8-5.0 percent for 2023. Vietnam’s key economic drivers in 4Q23 included the rebound in its export sector and accelerated public spending. However, roll over risks of real estate corporate bonds will remain the downside risk of Vietnam’s economy until at least the end of 2024.
        KResearch views that Vietnam's central bank will continue to hold its policy rate for at least another three months amid the Fed's ongoing tightening cycle even as Vietnam’s core inflation has steadily declined, and headline inflation has remained below the official target of 4.5 percent. As an expected hike in the Fed Funds rate will likely result in increased capital outflows from Vietnam and pressure the Dong to weaken, KResearch views that Vietnam’s central bank will continue to monitor the situation and may not cut its policy rate over the next three months.
        Meanwhile, KResearch projects that the value of Thai exports to Vietnam will increase by 2.7 percent YoY in 4Q23. However, the figure may contract 11.7 percent YoY during 2023 . The increase in Thai shipments to Vietnam in 4Q23 may be due to the low base of the previous year, and rising crude oil prices amid the ongoing Israel-Hamas conflict. Currently, refined petroleum products represent Thailand’s second largest export category to Vietnam. Factors that may pressure Thai shipments to Vietnam in 4Q23 may include the decline in Thai polymer exports to Vietnam after a Thai company has invested in the petrochemical complex in Vietnam to produce plastic pallets there. Its polymer manufacturing facility began operations in the second half of 2023, and it is expected that Thai polymer exports will decline steadily until mid-2024. Presently, plastic pallets represent Thailand’s fourth largest export category to Vietnam. 

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International Economy