Viet Nam’s Growth Support Policy Helps Counter Global Headwinds in 2023

HA NOI, VIET NAM (4 April 2023) — After a strong performance in 2022, Viet Nam’s economic growth is expected to moderate at 6.5% this year and further expand at 6.8% in 2024, according to the flagship economic publication of the Asian Development Bank (ADB) released today.

“Viet Nam’s economic growth will be constrained in 2023 by the global economic slowdown, continued monetary tightening in advanced economies, and spillover from global geopolitical tensions,” said ADB Country Director for Viet Nam Andrew Jeffries. “However, Viet Nam’s growth support policy with monetary easing, a large amount of public investment to be disbursed in 2023, and the reopening of the People’s Republic of China (PRC) will help the country counter these headwinds.”

The global economic slowdown deepened in the fourth quarter of 2022 and will likely continue in 2023, according to the Asian Development Outlook (ADO) April 2023. Falling global demand is expected to weigh on industrial growth. Agriculture output is expected to grow by 3.2% this year on revived domestic demand and the reopening of the PRC, which accounts for 45% of Viet Nam’s export of fruits and vegetables. 

Tourist arrivals from the PRC starting 15 March is expected to benefit the tourism and services in Viet Nam, with the sector forecast to grow by 8.0% this year. 

Public investment will be another key driver for economic recovery and growth in 2023 and 2024, spurring construction and other related economic activities. Along with the move to monetary easing in March 2023, public spending is expected to generate substantial multiplier effects, creating strong growth stimulus for the economy. 

The prolonged pandemic exposed structural issues that are among the main downside risks to the economy. Domestic capital markets come under pressure. Although the market turbulence has not yet caused serious systemic risks due to banks’ resilience, risks are becoming evident.  In the long term, financial sector reforms should be sustained to reduce the dependence of the economy on bank finance and enhance transparency in capital markets.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region. 

This was first uploaded on the ADB website.