Vietnam has witnessed strong growth in 2022 which was supported by a release of pent-up demand as Vietnam continued to lift pandemic-related mobility restrictions and travel bans. The country also benefited from a surge in private consumption and export growth.

After the strong rebound in 2022, Vietnam's GDP growth is expected to fall back as the growth of exports to major markets slows.

Specifically, the prolonged war in Ukraine and intensifying geopolitical uncertainty could further reduce global business and consumer confidence. This could lead to a sharper slowdown than projected in the Asia-Pacific region’s export growth through weaker global demand and trade disruptions. Such interruptions could lead to shortages and higher prices for food, fertilisers, and energy.

Further geopolitical fragmentation could also impede global trade and investment and weigh on regional growth for a prolonged period. Commodity- and export-dependent economies like Vietnam are particularly vulnerable to weaker export demand, including from China.

The report says that GDP growth is predicted to be 4 per cent in Malaysia and 5.4 per cent in the Philippines in 2023. Meanwhile, Thailand's GDP growth is expected to accelerate to 3.6 per cent, reflecting the delayed recovery of contact-intensive sectors like tourism and transport. In Indonesia, GDP is anticipated to grow by 4.9 per cent on average in 2023-24, only slightly slower than in 2022. This reflects softening but still robust private spending.