Vietnam’s economic growth in the first quarter of 2024 has been forecast at 5.5 per cent by Singaporean bank UOB.

According to the latest data from the General Statistics Office (GSO), Vietnam’s exports and industrial production fell sharply in February.

Exports were down 5 per cent year-on-year and industrial production 6.8 per cent, compared to increases of 42 per cent and 18.3 per cent, respectively, in January.

The steep declines were largely attributed to the Tet (Lunar New Year) holiday falling in February this year and January last year.

For a more meaningful comparison, combined January-February data shows that exports rose 17.6 per cent year-on-year while industrial production increased 5.7 per cent.

Vietnam’s Purchasing Managers’ Index (PMI), meanwhile, was above 50 in both January and February, compared to an average reading of 49.3 in January and February 2023.

Such data suggests that overall momentum in external trade and manufacturing is showing positive signs and UOB expects the pace to be sustained, especially in the second half of 2024, when recovery in the semiconductor sector is more entrenched and global central banks embark upon a more accommodative policy stance.

The bank has maintained its 2024 growth forecast at 6.0 per cent, which is within the official 6.0-6.5 per cent target.

For the first quarter of the year, growth is expected to come in at 5.5 per cent year-on-year compared to 3.3 per cent last year.

The bank anticipates inflationary pressure to remain on the upside, with headline CPI tipped to stay elevated at 3.8 per cent in 2024 against 3.25 per cent in 2023.