Singapore-based United Overseas Bank (UOB) has maintained its forecast for Vietnam’s economic growth at 6% for the whole year on the back of the recovery of both domestic and foreign demand as well as production sector in the first half, according to a report from the Vietnam News Agency.

The State-run news agency quoted Executive Director in Global Economics and Markets Research at the UOB, Mr. Suan Teck Kin, as saying at the launch of the UOB Business Outlook Study 2024 held in Ho Chi Minh City on July 16 that motives for the economic growth came from the recovery of the demand for electronic products, stable growth in China and the region as well as central banks’ loose monetary policies, elaborating the economy expanded 6.42% in the first half as compared to 3.42% recorded in the same time last year.

The production sector grew for the fifth consecutive quarter, at 10%, while the services industry recorded expansion for the 11th consecutive quarter, he said, adding the two contributed 29% and 45%, respectively to the GDP growth of 6.42%. During January-June, export and import grew 14% and 16.6%, with a trade surplus of $11.3 billion.

Total retail sales were stable during the six-month span, backed by the tourism sector which welcomed 8.8 million tourist arrivals as compared to only 5.6 million in the same time last year, according to  Mr. Suan Teck Kin.

Regarding foreign investment attraction, UOB specialists held that foreign firms have relished a positive prospect for the Vietnamese economy in the coming time, adding they funneled $15.2 billion in foreign direct investment (FDI) into the country in the first half, up 13.1% year-on-year while the disbursed amount in the period was $10.88 billion.

The UOB experts have been upbeat about Vietnam’s FDI attraction as foreign investors have seen Vietnam as an important investment destination for mid- and long-terms amidst the global restructuring of supply chains. Besides, the increase of both disbursed and registered FDI capital will bolster domestic activities in the coming quarters, comprising construction and employment, which affirms foreign enterprises’ confidence in and commitment to Vietnam in the context of the current delocalization and supply chain transition.

Mr. Suan Teck Kin also pointed to several challenges that Vietnam should keep close tabs on to maintain its strong growth in the second half, including conflicts across the globe and inflation pressure.

He suggested the country expand and diversify its markets and supply to prevent the impacts of the supply chain and transport disruptions.

Last month, the bank projected the economic growth rate of Vietnam at 6% for the whole 2024 on increasing chip-making demand, the recovery of Chinese and regional economies, as well as ongoing supply shifts.