Vietnam's 3Q economic growth to reach 10.8%: Standard Chartered

Standard Chartered economists forecast that the State Bank of Vietnam will keep the policy rate at 4% in 2022 to support businesses as well as the economy's growth despite rising inflation.

Retail sales growth will continue to improve strongly at 30.2% in July, compared with 27.3% in June. Exports, imports, and industrial production are forecast to increase 22.2%, 20%, and 15% respectively in July compared with 20%, 16.3%, and 11.5% in June. It is expected that Vietnam may record a trade deficit this month.

"We expect inflation to increase to 3.6% in July, compared with 3.4% in June - the fastest increase in the past 2 years, mainly due to pressure from the source. supply, while the pressure from the demand side also gradually increases. At the moment, the inflation situation is still under control, Mr. Tim Leelahaphan, economist for Thailand and Vietnam at Standard Chartered, said.

Fuel prices increased while prices of other commodities in the inflation basket remained relatively low. Price pressures, especially food and fuel, are likely to increase in the second half of 2022 and into 2023.

Vietnam has continuously reduced gasoline prices (about 20%) since the beginning of July 2022, after 7 consecutive price increases since the end of April. The Government has also proposed to reduce the import tax on gasoline to 10% from 20%.

Standard Chartered economists forecast that the State Bank of Vietnam will keep the policy rate at 4% in 2022 to support businesses as well as the economy's growth despite rising inflation.

Retail sales growth will continue to improve strongly at 30.2% in July, compared with 27.3% in June. Exports, imports, and industrial production are forecast to increase 22.2%, 20%, and 15% respectively in July compared with 20%, 16.3%, and 11.5% in June. It is expected that Vietnam may record a trade deficit this month.

We expect inflation to increase to 3.6% in July, compared with 3.4% in June - the fastest increase in the past 2 years, mainly due to pressure from the source. supply, while the pressure from the demand side also gradually increases. At the moment, the inflation situation is still under control, Mr. Tim Leelahaphan, economist for Thailand and Vietnam at Standard Chartered, said.

Fuel prices increased while prices of other commodities in the inflation basket remained relatively low. Price pressures, especially food and fuel, are likely to increase in the second half of 2022 and into 2023.

Vietnam has continuously reduced gasoline prices (about 20%) since the beginning of July 2022, after 7 consecutive price increases since the end of April. The Government has also proposed to reduce the import tax on gasoline to 10% from 20%.

Source: VGP