The difficulties for both Vietnam’s economy and the global economy are expected to linger in the first half of the year, but the second half should be much brighter, analysts told the “Global Economic and Financial Outlook Update 2023: Implications for Vietnam” seminar held by the Ministry of Foreign Affairs (MoFA) and Standard Chartered Bank on February 28.

The start of 2023 has been more positive than expected. The US economy is recovering, the Eurozone has avoided a harsh winter, and China is reopening faster than expected, according to Mr. Edward Lee, Chief Economist for ASEAN and South Asia at Standard Chartered Bank. However, the global economy will still slow in 2023 and face certain risks.

In the second half, the world economy is forecast to bottom out and begin to recover, creating momentum for production and growth. Global growth is forecast at 2.5 per cent for the year. Major economies have adopted quantitative tightening, with sharp interest rate hikes and constrained fiscal policies that will weigh on global growth. Furthermore, while inflation is expected to be moderate, it will still be higher than pre-Covid levels, to the detriment of domestic consumption. Global trade volumes have declined since the end of last year, suggesting that external demand is slowing.

In terms of Vietnam’s economic outlook, Mr. Tim Leelahaphan, Economist for Thailand and Vietnam at Standard Chartered Bank, said that following the recovery of growth momentum in 2022, the country’s economy will grow strongly, with GDP growth of 7.2 per cent this year and 6.7 per cent next. Inflation is expected to come in at about 6 per cent in 2023, and while the trade balance will be better there will be some global challenges for exports.

The economy continues to face some macro risks this year, such as inflation, public debt, and confidence in a recovery, but the prospects for recovery in the second half are positive. Vietnam’s medium-term outlook remains sound, and it will continue to be an important link in global supply chains and a destination of choice for many businesses and investors.

Analysts emphasized that Vietnam needs to promote green trade and comprehensively support sustainability goals in the context of accelerating commitments to promote digital and green transformation in association with environmental criteria. Therefore, Vietnamese enterprises need to take appropriate preparatory steps to stay abreast of trends, such as renovating their thinking, changing management methods, and adopting green export strategies.

Ms. Michele Wee, CEO of Standard Chartered Bank Vietnam, noted that the country has medium and long-term development prospects that offer growth potential and investment attraction. Vietnam is playing an increasingly important role in international trade and global supply chains. “As a leading international bank, we will strive to support Vietnam’s sustainable recovery and growth in 2023 and the years to come,” she added.