Vietnam's Economic Outlook: Projected 7.6% GDP Growth in Third Quarter

Driving Forces Behind Vietnam's Growth

According to UOB Bank (Singapore), the manufacturing sector, increasing FDI capital, and recovering tourism are the primary drivers of Vietnam’s growth.

Growth Projections

UOB Bank (Singapore) forecasts that Vietnam’s GDP growth in the second quarter of this year will reach 6% year-on-year, with a further increase to 7.6% in the third quarter.

Manufacturing Sector Strength

According to UOB, recent data shows that Vietnam’s underlying growth momentum remained unchanged in the second quarter. The manufacturing sector continued to increase enormously, the first 5 months of the year recorded a growth of 9.24% over the same period, from 8.28% in the first 4 months of the year. This result is also reflected in the Purchasing Managers’ Index (PMI) whose 8th month continued to increase.

FDI Inflows

Despite geopolitical uncertainties and rising commodity prices, foreign direct investment (FDI) inflows into Vietnam increased somewhat in May. This indicates continued confidence from foreign investors in Vietnam's economic prospects.

Resurgence in Tourism

Domestic COVID-19 restrictions being lifted and the resumption of international tourism activities have breathed new life into the service sector. UOB expects tourism-dependent sectors such as accommodation and food to experience growth again in the second quarter of 2022, following nine consecutive quarters of decline.

These factors collectively contribute to Vietnam’s growth trajectory, with the manufacturing sector leading the charge, supported by increasing FDI inflows and a revitalized tourism industry.

Reference: Cafef