HSBC has raised its Vietnam growth forecast in 2022 from 7.6 per cent to 8.1 per cent as the country experienced a booming recovery this year.

In its recently-released “Asian Economics Quarterly: Retooling Factory Asia” report, the bank said Vietnam made a booming recovery in 2022, which makes it more likely to continue to be one of the countries in Asia with outstanding growth.

However, challenges will have greater impact on the country next year, especially when the effect of reopening fade and the impact of high inflation becomes clearer, according to the bank. It forecast that Vietnam’s growth next year is likely to be down, at 5.8-6 per cent.

It also warned that Vietnam needs to prepare for an “export winter”.

After posting year-on-year growth of over 17 per cent in the first three quarters of this year, Vietnam’s export growth slowed in October and was down sharply in November compared to November 2021 and 2020.

A decline in exports was seen in fields such as electronics, garments, footwear, wooden furniture, and machinery. The US’s economic downturn makes the situation even worse, as the country is Vietnam’s largest export market.

However, the bank also noted that businesses have continued to invest in Vietnam. Giant tech corporations like Samsung and LG have recently announced ongoing investment in the country, demonstrating its long-term attraction.