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ADB maintains 2022 growth forecast for Vietnam

ADB maintains 2022 growth forecast for Vietnam

Saturday, July 23, 2022, 10:00 GMT+7
ADB maintains 2022 growth forecast for Vietnam
Vietnam has put inflation under control due to its strong food supply. Photo: Quang Dinh / Tuoi Tre

The Asian Development Bank (ADB) is holding steadfast in the 6.5 percent growth forecast it predicted for Vietnam in 2022 and the 6.7 percent growth forecast it predicted in 2023, both of which were released in its April 2022 Asian Development Outlook (ADO).

Vietnam’s growth will be driven by continued trade expansion, the faster-than-expected recovery of the manufacturing and domestic travel sectors, and the disbursement of public investment, according to the lender’s ADO Supplement July 2022 released on Thursday.

Like other countries in the region, Vietnam also faces pressure from inflation due to surging global commodity prices, particularly global oil prices.

ADB suspects, however, that Vietnam’s abundant domestic food supply will be a major contributor to the country’s inflation coping strategy during 2022.

This is a major factor contributing to ADB doubling down on the inflation forecasts for Vietnam it released in April, which were 3.8 percent and 4 percent for 2022 and 2023, respectively.

The report also noted that developing countries throughout Asia and the Pacific region are still recovering from COVID-19, though many are easing mobility restrictions to strengthen economic activities.

However, growth has slowed in China, the region’s largest economy, due to disruption from recently enacted COVID-19 lockdowns coupled with weaker global demand.

While ADB maintained its forecasts for Vietnam, it decided to lower its economic growth forecast for the region to 4.6 percent in 2022 due to slower expansion in China, more aggressive monetary tightening in advanced economies, and fallout from the continued Russia-Ukraine tension.

This outlook compares with a projection of 5.2 percent issued by ADB in April.

The bank also raised its forecast for inflation in the region, amid higher prices for food and fuel, increasing to 4.2 percent this year, compared with a previous forecast of 3.7 percent.

However, inflation pressure in the region as a whole is still lower than elsewhere in the world.

For 2023, ADB lowered its economic growth projection for the region to 5.2 percent from 5.3 percent, while inflation is forecast to rise from 3.1 percent to 3.5 percent.

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Nhu Binh / Tuoi Tre News

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