The World Bank just issued a report reviewing and providing updates on Vietnam’s economic situation in March 2023, in which it predicts that Vietnam’s GDP will likely reach 6.3% this year due to challenges from both domestic and international situations, and urges authorities to strengthen coordination and develop suitable supporting policies.
Specifically, though Vietnam’s tourism industry is recovering thanks to the return of Chinese tourists, growth remains weak, and domestic travel is expected to take a hit due to higher inflation this year, which is expected to be around 4.5%.
Exports in the first half of this year will also slow down due to weak demand in the U.S. and the Eurozone, while China’s economic recovery remains uncertain. As a countermeasure, the WB emphasized the importance of implementing the Economic Support Program, which would account for about 1.6% of GDP, with a focus on priority public investment projects to support growth and create liquidity for the economy.
In addition, pressure on the exchange rate will continue, requiring flexibility in interest rate management and increased supervision to limit financial risks.
