HCM CITY — Domestic factors, including a ramp-up in Government infrastructure spending, a revival of the real estate market and a recovery in consumer spending, will help Việt Nam sustain GDP growth of around 6.5 per cent next year, Michael Kokalari, chief economist at VinaCapital, has said in his recent “Looking ahead at 2025” report.Exports to the US and foreign tourist arrivals surged this year, but the growth of both was set to slow dramatically next year, he said.Exports to the US rose by well over 20 per cent this year (versus a 10 per cent drop in 2023), the main factor supporting 2024 GDP growth.That was driven by a 40 per cent jump in exports of electronics and other high-tech products.“Despite the expected slowdown in manufacturing output growth next year, we expect Việt Nam to achieve 6.5 per cent GDP growth in 2025 because we expect the composition of the growth to transition to more domestically driven factors next year.”Consumer spending recoveryReal retail sales growth (stripping out the impact of inflation) was around 6 per cent in 2024, below the 8-9 per cent typical rate.Furthermore, some half of that 6 per cent was attributable to the continued rise in foreign tourist numbers from 70 per cent of pre-COVID levels in 2023 to 100 per cent in 2024.Consumption accounted for over 60 per cent of the economy (versus 25 per cent for manufacturing), and so higher consumption growth would easily compensate for slower growth in exports/manufacturing/tourist arrivals next year.The Government had indicated it would increase infrastructure spending in 2025, and hopes were high that this and other measures would also make consumers more confident about increasing spending.Long-term GDP growthThe national assembly had set a 2025 GDP growth target of 6.5-7 per cent, and Government officials recently announced multiple measures to boost the economy, including increased infrastructure spending and serious structural reforms.These measures would certainly boost long-term GDP growth but might not be sufficient to offset slower export growth next year, which meant more drastic measures could be required to meet growth targets.It was possible that 2025 would be somewhat volatile for the economy and stock market.“In the first half of 2025, falling export growth will likely deal a bigger blow to GDP growth than many economists expect.“That dip would probably prompt aggressive Government actions to support the economy, especially in light of the very ambitious GDP growth targets..."The VN-Index was up 12.1 per cent for the year as of 18 December, despite record selling by foreign investors, which was partly prompted by a near 5 per cent fall in the value of the dong. — VNS (ICE HO CHI MINH CITY)

Fonte notizia: Vietnam News