UOB Bank believes that Vietnam’s growth may slow down in the next two quarters due to a high base and existing external risks. The General Statistics Office reported a GDP increase of 6.93% in the second quarter compared to the same period in 2023, following a 5.87% growth in the first quarter. Despite this positive performance, UOB’s research team warns that growth momentum may slow down in the second half.
Factors such as semiconductor demand recovery, stable growth in China and Southeast Asia, and potential monetary easing by major central banks could support Vietnam’s outlook. However, external risks such as conflicts in Ukraine and the Middle East could disrupt trade and energy markets.
UOB maintains its forecast for Vietnam’s growth at 6% for the year, which is the lower limit of the government’s target range of 6-6.5%. The bank anticipates that the State Bank of Vietnam (SBV) will maintain its refinancing rate at 4.5% given the recent depreciation of the Vietnamese Dong against the US dollar and rising inflation. The CPI increased by 4.39% in the second quarter compared to the same period last year, nearing the 4.5% threshold.
With opportunities for monetary easing from major central banks like European Central Bank cutting interest rates in June and US Federal Reserve possibly easing monetary policy in the second half of the year, there may be potential avenues for SBV to follow suit. The government is focusing on non-interest rate measures to support economic growth as it is expected to ease in the last two quarters of