At the World Bank (WB) event on the release of its "Taking Stock" report on March 13, the bank's Vietnam Country Director Carolyn Turk said that Vietnam’s economy performed relatively well in the last six months.

She said Vietnam had an 8 percent GDP growth rate in 2022, the highest level in the world, though she stressed that the rate was obtained partially because of the low starting point in the previous year.

World Bank experts believe the impact of the SVB collapse will affect financial and monetary policies, which will require timely action by policymakers, including in Vietnam.

The further tightening of global financial conditions may affect Vietnam’s financial sector, which is experiencing a balance sheet weakness in the corporate, banking and household sectors, affecting the confidence of investors and domestic consumers.

Vietnam needs to strictly monitor the banking system, especially small banks, said Turk.

The World Bank warned that internal and external obstacles will be reflected in economic growth. This will cause the GDP growth rate to slow to 6.3 percent in 2023, lower than the 8 percent in 2022 and the 6.5 percent targeted by the National Assembly.

Experts believe that short-term prospects are favorable, but Vietnam will face risks, including those raised by the US bank's collapse as well as geopolitical conflicts, high inflation around the world, and a slowdown in growth of the service sector.

Lower consumption and high interest rates will also affect private investments.

In the time to come, fiscal policy will play a more important role in Vietnam’s economy.

Analysts say that the collapse of the US bank was due to a strong rise in short-term capital and bad risk management, as well as unpredictable adverse effects in the financial market.

Manh Ha