Vietnam’s growth likely 2nd fastest in Southeast Asia in 2023 -IMF

The International Monetary Fund (IMF) expected Vietnam to continue to be one of the fastest-growing economies in the Southeast Asian region, local media reports on Monday.

The IMF projection came as the growth of Vietnam’s gross domestic product is expected to reach 5.8 per cent in 2023 and accelerate to 6.9 per cent in 2024, the report said.

Daniel Leigh, head of the IMF’s World Economic Studies said the IMF has just revised up the growth forecast for Vietnam, making it second only to the Philippines in the region.

However, the IMF’s 2023 forecast is lower than the World Bank’s prediction of 6.3 per cent growth rate for the Southeast Asian country and the Asian Development Bank’s expectation at 6.5 per cent.

In addition, the IMF expected Vietnam’s inflation to rise in line with the global inflation trend but above the Vietnamese government’s target, from 3.2 per cent in 2022 to five per cent this year and 4.3 per cent next year.

Vietnam is targeting economic growth at 6.5 per cent while keeping inflation below 4.5 per cent for this year.

In order to maintain growth momentum, the IMF economist advised the country to pursue a monetary policy stance that is consistent with achieving the inflation target, and a fiscal policy focused on supporting vulnerable individuals and businesses.

Leigh said regarding financial stability, to stabilise the real estate and corporate bond markets should be a priority but not at the cost of higher inflation.