Despite many difficulties due to increasing interest rates, the pressure on the capital market is expected to decrease gradually in 2023, experts forecast.

Citing forecast data of financial institutions, financial expert Dr Dinh The Hien said Viet Nam's GDP growth rate in 2023 will slow to below 7 per cent, but it is still a good growth rate compared to that of ASEAN region (4.9 per cent), Asia-Pacific (4.6 per cent), and the world (2 per cent). The National Assembly has recently also approved the country’s GDP in 2023 at about 6.5 per cent, which is also close to the above forecasts.

Hien said both international financial institutions and Vietnamese experts forecast the difficulties and challenges of the Vietnamese economy in 2023 will come from external factors, especially the decline in consumption of developed countries and disruption of the global supply chain. However, Viet Nam still has certain advantages and opportunities besides the pessimism on interest rates and inflation.

According to Hien, Vietnamese management authorities have gradually controlled high interest rates and restricted credit, which will help the country avoid shocks like in the 2011-12 period. Therefore, concerns about the banking system and corporate bonds have been gradually removed.

Hien predicts difficulties related interest rates and credit will be resolved next year. Interest rates will cool down in the first quarter of 2023 and stabilise by the end of the second quarter of 2023. Credit sources with reasonable interest rates for production and business enterprises will increase gradually from the second quarter of 2023. Meanwhile, exports will continue to decline in the first two quarters of 2023, but will rebound in the third quarter of 2023.

"The difficulties for the domestic economy will ease from the second quarter of 2023 and gain positive growth from the third quarter of 2023, buoyed by upbeat impacts from public investment, and financial and monetary stability. At the same time, the real estate market is also expected to recover slightly from the fourth quarter of 2023, mainly in urban areas, industrial parks and other areas with strong infrastructure investment," Hien forecast.

Tran Ngoc Bau, CEO of financial data provider WiGroup Data Company, is also upbeat about market liquidity in 2023.

According to Bau, though the economic forecast in 2023 is more difficult than in 2022, with initial signals such as export order decline, the cause will be a factor for the Government to partly loose the monetary market to stimulate economic development. Therefore, the market liquidity is likely to be more positive in the second half of 2023.

Nguyen Quang Thuan, chairman of financial data provider FiinGroup, expects the corporate bond market in 2023 will be more active as credit institutions increase to issue bonds after policies are changed.

The market also expects many businesses in 2023 will issue bonds to the public after being rated.

In addition, other capital channels such as issuing green bonds and borrowing/issuing international bonds are also forecast to be further improved, helping businesses have more opportunities to access capital.

However, experts also recommend in the difficult context, businesses need to review their investment portfolios and limit high risk projects. The businesses should review current debt obligations, proactively make public transparent information and improve credit profile for a longer-term capital strategy. — VNS