Vietnam's GDP Growth Remained Highest in SEA: World Bank
Analyzing the economies in Southeast Asia in the latest data report, World Bank's experts said that global merchandise trade recorded a dismal growth in 2023.
"This situation is likely to affect the performance of a number of economies where trade is a key driver of growth, particularly in Malaysia and Vietnam, where growth is forecast to be moderate," as stated in the report.
The World Bank's report forecasted that Vietnam's GDP growth in 2023 will reach about 6%, down about 0.3 percentage points compared to the forecast in January.
Meanwhile, for Malaysia, the country's GDP is expected to grow 4.3% in 2023, up 0.3 percentage points from the January forecast.
In addition, the continued recovery of the global tourism industry, fueled by an increase in tourist arrivals from China, will support the growth of the economies most dependent on China. tourism, such as Thailand. Accordingly, Thailand's GDP in 2023 is expected to increase by 3.9%.
|GDP growth rate of Southeast Asia countries tn the latest data report by World Bank (Screenshot from the report).
Although Vietnam's GDP growth forecast is one of the rates experiencing a drowgrade for 2023, it is still leading in Southeast Asia.
Specifically, in 2023, tie in first place for the country with the highest GDP growth rate in the region is the Philippines and Vietnam. Both are expected to grow at 6% GDP, according to World Bank.
In third place is Cambodia with GDP growth at 5.5%. Next is Indonesia, with a GDP growth of 4.9%. With GDP in 2023 expected to grow by 4.3%, Malaysia will be the 4th fastest growing country in the region. Followed by Laos and Thailand, with GDP growth expected both at 3.9% in 2023.
By 2024, the growth rate in East Asia - Pacific is projected to slow to 4.6% due to the impact of China's reopening diminishes. Negative risks to the outlook include tighter-than-expected global financial conditions and persistently high inflation. China is also experiencing persistent weakness in the real estate sector, as well as geopolitical tensions, natural disasters and extreme weather events related to climate change.
Indermit Gill, Chief Economist and Senior Vice President of World Bank Group, said debt pressure due to higher interest rates is increasing in these markets. With that, trade will grow at less than a third of what it was in pre-pandemic years.
Also, many developing economies are currently struggling to cope with weak growth, persistently high inflation and high debt levels, according to World Bank Group Deputy Chief Economist Ayhan Kose.
|At the press conference to release the report.
Earlier this year, as reported in Taking Stock March 2023 titled "Harnessing the potential of the services sector for growth" issued by World Bank, the short-term focus in Vietnam is appropriately on the implementation of the capital budget, including the projects identified in the Economic Recovery Program that include digital and physical infrastructure.
These projects would help bolster domestic demand in the near term and contribute to Vietnam’s long-term potential growth. In the medium term, addressing institutional bottlenecks that have led to the chronic under-execution of the public investment program would make fiscal policies more effective. In addition, continued expansion of the targeted social safety nets would help buffer the effects of elevated inflation on poor and vulnerable households and cushion impacts on private consumption. Following last year’s tightening measures, monetary policy will need to continue balancing inflation, financial stability, and growth objectives.
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