The bank maintains its GDP growth forecast of 10.8 per cent year on year in Q3 and 3.9 per cent in Q4 taking 2022 growth to 6.7 per cent.

“The recovery may accelerate markedly in H2 as tourism reopens after a two-year closure. That said, rising global oil prices may have negative consequences on the economy,” said Tim Leelahaphan, economist for Thailand and Vietnam at Standard Chartered Bank.

According to the UK-based bank, retail sales growth is likely to continue to accelerate to 60.2 per cent year on year in August from 42.6 per cent in July. Export, import, and industrial production growth may have risen to 15.2 per cent, 15.0 per cent, and 15.2 per cent, respectively from 8.9 per cent, 3.4 per cent, and 11.2 per cent in July. A trade deficit of $1.4 billion is expected in August; electronics are Vietnam’s largest export category.

Standard Chartered economists see inflation at 3.0 per cent year on year in August in comparison to 3.2 per cent in July and believe it is under control for now. Price pressures may increase in H2 2022 and 2023; in addition to supply-side factors, demand-side factors might kick in more strongly.

Standard Chartered Bank expects the State Bank of Vietnam (SBV) to stay vigilant against financial instability. The SBV plans to keep this year’s credit growth target at 14 per cent, despite calls to raise it to ease cash-flow bottlenecks in the property market, according to Governor Nguyen Thi Hong.

Banks may face greater liquidity risks on excessive lending to the real-estate sector – while 94 per cent of property loans have maturities of 10-25 years, 80 per cent of banks’ deposits are short-term.

Vietnam’s credit growth has accelerated this year; it picked up to 9.4 per cent year-to-date, according to the SBV. Outstanding lending to the property sector represented about one-fifth of total loans.