In recent assessments, UOB Bank in Singapore has concluded that Vietnam’s domestic economic activities are showing positive progress. Exports and FDI have shown growth, leading to an increase in the second-quarter GDP forecast by 6%. According to data until May, Vietnam’s growth trajectory is looking promising, with the purchasing managers’ index (PMI) reaching 50.3 and exhibiting positive growth momentum. The index of industrial production (IIP) increased by 6.8% during the first five months of the year.
Exports have been growing at a double-digit rate, and FDI has increased by 7.8% to 8.3 billion USD since the beginning of the year. This growth in FDI is the fastest in a five-month period since 2018, indicating investor trust in Vietnam’s political environment, value, and competitiveness. UOB believes that domestic operations are on track, with retail sales of goods and consumer service revenue improving particularly in sectors like restaurants, accommodations, and tourism.
Vietnam’s economy grew by 5.66% in the first quarter, and UOB has kept its full-year forecast at 6%. The State Bank is expected to maintain the key policy interest rate unchanged for the remainder of the year. The Vietnamese dong has been under pressure due to the strength of the USD but is expected to recover in the second half of the year. This recovery is attributed to several factors including an interest rate cut by the US Federal Reserve in September and stabilization of Chinese economy which will help stabilize Vietnamese currency market too .
UOB forecasts that the USD/VND exchange rate will be approximately 25,200 in third quarter and 25,000 in fourth quarter respectively . Despite these challenges , UOB remains optimistic about Vietnam’s economic growth and currency stability citing positive indicators such as GDP growth , PMI index , IIP index as well as other external factors like interest rates cuts from US Federal Reserve , China economic stabilization .