Việt Nam’s GDP growth forecast to rank 2nd in ASEAN

<p>Việt Nam’s GDP is projected to grow 5.8 percent this year. <em>(VNA/VNS Photo)</em></p>

Việt Nam’s GDP is projected to grow 5.8 percent this year. (VNA/VNS Photo)

HÀ NỘI Việt Nam’s gross domestic product (GDP) is projected to grow 5.8 percent this year, sharing the second position with Cambodia in the region, only after the Philippines, according to the International Monetary Fund (IMF).

Notably, Việt Nam’s public debt is expected to stay at the lowest compared with eight other Association of Southeast Asian Nations (ASEAN) member countries, the fund said.

The fund also forecasts that Việt Nam’s GDP growth will rebound to 6.9 percent in 2024, the highest in Southeast Asia, and its public debt will fall to 31.3 percent of the national GDP in 2028 from the record 47.5 percent in 2016. The debt-to-GDP ratio in 2028 will be the lowest in two decades.

In terms of inflation, the lender said it will reach 5 percent and 3 percent in 2023 and 2024, respectively.

The State Bank of Việt Nam (SBV) has constantly cut regulatory interest rates, paving the way for credit institutions to reduce their lending interest rates, thus spurring economic growth, said Đào Minh Tú, deputy governor of the SBV.

Experts described the central bank’s reductions as flexible and timely, and expected that 12-month deposit interest rates will hover around 7 percent and lending interest rates 10 percent.

The bank has substantial room to further loosen monetary policy this year, they said, noting that it will continue to cut policy rates by 50 basis points in the second quarter of this year.

Experts from the Bảo Việt Securities JSC shared the view that the biggest pressure on interest rates last year came from the US Federal Reserve's continuous rate hikes, making the US dollar soar to a 20-year high.

Meanwhile, those from the United Overseas Bank (UOB) said Việt Nam’s GDP growth of only 3.32 percent in the first three months of this year, down from 5.92 percent in the last quarter of 2022, will prompt the central bank to further cut regulatory interest rates, and that the bank is likely to further relax policies. (VNS)