According to the Ministry of Planning and Investment (MPI), in the first half of 2023, the disbursement of public investment reached VND216 trillion, 28 percent, or VND65 trillion higher than the same period last year. This is a very encouraging figure, experts said. 

The government plans to disburse VND711 trillion in 2023, which means that VND495 trillion more ($21 billion) would be disbursed in the last six months. Many large transport infrastructure projects have kicked off.

In its recent report, VNDirect Securities noted that the driving force for Vietnam’s GDP growth in the last six months mostly came from government support policies.

VNDirect expects the growth rate for the second half to reach 7.1 percent in comparison with the same period last year, thus helping reach the GDP growth rate in 2023 to 5.5 percent.

The recovery in the second half will be helped by the expansionary fiscal policy and lower interest rates. 

BIDV Training and Research Institute predicted that with the basic scenario, the GDP growth rate of the whole year this year will be 5-5.5 percent (7-7.2 percent in the third quarter and 6.8-7 percent in the fourth quarter).

FIDT, an investment consultancy and asset management firm, believes that with the current interest rate policy for the second half, interest rates will continue to drop early in the third quarter and become stable to support economic growth.

In a recent move, the Ministry of Finance (MOF) announced an import tariff cut on petroleum imports. Analysts commented that the move will help lower inflation, which is an important factor for the State Bank of Vietnam (SBV) to slash interest rates further.

UOB’s analysts, in its latest report, predicted that operating interest rates would decrease by another 100 basis points in the third quarter before the central bank temporarily stops the cut to review the impact of the move.

UOB said that the third quarter would be an important period for the economy, because it would witness increases in production and export activities to serve demand in the year-end sale season in developed countries.

Maybank Investment Bank (MSVN) believes the policy reversal will help reduce the structural risk related to the instability of the real estate market.

Vicente Nguyen, CIO of AFC Vietnam Fund, is optimistic about economic performance in the last six months, saying that the economy will improve thanks to public investment and export recovery, especially in textiles and garments, seafood and woodwork. 

The recovery of the world economy will also support the recovery of Vietnam’s economy.

He predicted that the US economy could obtain a 2 percent growth rate in the second quarter, and that the business fields that suffered the most will benefit when the US economy recovers. These include the main export industries of Vietnam to the US. Textiles and garments, wooden furniture, and seafood companies all have suffered, but with the recovery of the US economy, the industries will also recover. 

Stock market 

As the economy is expected to perform better in the time to come, the stock market will also improve with the recovery of listed companies.

VNDirect Securities says that Vietnam’s stocks deserve to be more highly valued. The VN-Index is expected to regain the 1,300-point peak in the second half. Cash flow to the stock market has begun recovering, showing improvement in investors’ confidence.

The business results of listed companies will recover in the last six months with the EPS (earnings per share) on the HCM City Stock Exchange (HOSE) expected to reach 10.4 percent in 2023 and 19.3 percent in 2024

According to Maybank Investment Bank (MSVN), stock market growth will be supported by strong liquidity and businesses’ incomes recovering in the fourth quarter.

Manh Ha