The bank also lowered its forecast for 2024 from 6.8% to 6%, according to a report released on September 27.
The ADB said Vietnam’s economy has been primarily affected by the global economic slowdown, monetary tightening in some advanced economies and disruption caused by exacerbated geopolitical tensions.
Inflation forecasts are revised down to 3.8% from 4.5% for 2023 and 4.0% from 4.2% for 2024.
“Weak external environments, including a subdued recovery in China, has hampered export-led manufacturing, thus shrinking industrial production in Vietnam,” said ADB Country Director for Vietnam Shantanu Chakraborty.
But he noted that the Vietnamese economy remains resilient and recovery is expected to pick up in the near future, driven by strong domestic consumption, which is supported by moderate inflation, an acceleration of public investment and improved trade activities.
According to the ADB’s report, while Vietnam’s industrial production is shrinking due to falling global demand, other sectors are forecast to demonstrate healthy growth.
Services are expected to continue expanding, supported by a revival in tourism and the recovery of associated services. Agriculture will benefit from rising food prices, and it is expected to expand by 3.2% in 2023 and the following year.
