At the same time, the international lender has also slashed its inflation forecast for 2022 to 3.3 per cent from 4.2 per cent and raised inflation in the fourth quarter (Q4) to 5 per cent from 3.3 per cent in Q3.

Standard Chartered has adjusted Vietnam’s GDP projection for 2022 to 7.5 per cent, which is higher than its 6.7 per cent forecast of August. The country’s GDP expectation for 2023 has also been increased to 7.2 per cent from 7 per cent. At the same time, the international lender has slashed its inflation forecast for 2022 to 3.3 per cent from 4.2 per cent.

“We maintain our average 2023 inflation forecast at 5.5 per cent, expecting it to rise throughout next year, reaching around 6 per cent late next year. We see inflation as a threat to Vietnam’s continued recovery,” economist for Thailand and Vietnam, Standard Chartered Bank, Tim Leelahaphan was quoted as saying by Vietnamese media reports. Leelahaphan projected that the State Bank of Vietnam would resume tightening monetary policy and predicted a 50 basis point (bps) hike in the refinancing rate each in Q4-2022 and Q1-2023; thus, taking the rate to 6 per cent after a 100 bps hike to 5 per cent on September 22, 2022.

While inflation has been mostly under check, price pressures may rise in the remaining year and 2023. The depreciation of the Vietnamese dong (VND) is also expected to slow down in the next months, as per Standard Chartered. Moreover, the Vietnamese Dong is anticipated to reach VND 24,200 per USD by the end of 2022, VND 24,000 per USD by the end of Q1 2023, and fall to VND 23,400 per USD by the end of 2023.

Fibre2Fashion News Desk (NB)