Vietnam’s GDP growth is set to accelerate over the remainder of 2023 as interest rates are clearly trending downwards, according to a PYN Elite report released on May 25.

There is no indication that interest rates will stay high, as there is no need to fight inflation when prices have been kept relatively stable. The Vietnamese Government’s growth target is 6.5 per cent this year.

PYN Elite’s expectation is slightly more moderate, at 5.5 per cent.

Stocks are attractively priced in Vietnam, meanwhile, and it remains to be seen when the country’s improved liquidity conditions and lower interest rate environment will encourage investors to return in large numbers to the buy-side.

The government has taken effective measures to accelerate economic growth. The speed of decision-making has surprised many investors, even though the stock market is still consolidating without a clear upturn. The net asset value (NAV) of PYN Elite has been crawling upwards and is now +6 per cent year-to-date.

Vietnam’s GDP growth slowed to 3.3 per cent during the first quarter. The country’s exports have recorded weak numbers since autumn, as in other Asian exporting countries, but the weakness in exports is not the key reason for the slowdown in Vietnam’s GDP growth.

In late autumn, the actions of the authorities dried up the liquidity and shot interest rates up, creating uncertainty in the domestic economy, and as a result consumers postponed their planned purchases. Domestic consumption has most probably touched the bottom during the first quarter of the year.

Source: VNECONOMY