Vietnam’s economy grew 7.7 per cent year-on-year in the second quarter, which prompted VinaCapital to raise its GDP growth forecast for the year from 6.5 per cent to 7.5 per cent, with the possibility of the figure exceeding 7.5 per cent.

In its updated outlook report, VinaCapital believes that year-on-year growth of 10 per cent in the third quarter will be an important catalyst for investors to pour money into the country’s stock market.

The only warning sign is that growth is slowing in the US. Vietnam’s export growth to the US is expected to come down to around 10 per cent by year-end, as the US economy continues to slow, and VinaCapital has weighed this risk in its 2022 Vietnam’s GDP growth forecast since the beginning of the year.

Additionally, growth in domestic consumption boosted Vietnam’s growth in the first half of the year and also profit growth at non-essential consumer businesses listed on the stock exchange, such as Digiworld (DGW) and FPT Retail (FRT).

Moreover, while investors are focusing on inflation globally, inflation in Vietnam is still modest, at only 3.4 per cent year-on-year at the end of June. The main influence on inflation in Vietnam is global oil prices, so the recent fall should put investors at ease.

The most important point is that Vietnam’s inflation rate is likely to remain well within the target of the State Bank of Vietnam (SBV), of 4 per cent, so it is very unlikely that the central bank will raise interest rates this year, in contrast to other emerging markets in the region, which are raising interest rates.