HSBC has raised Vietnam's GDP growth forecast to 7 per cent for 2024. Photo: baodautu.vn

There have been concerns that the impact of Typhoon Yagi, the strongest storm Vietnam faced in 70 years, would weigh on growth. The northern provinces were hit particularly hard in early September, with damages estimated at over $3 billion.

However, the impact has been primarily concentrated in the agriculture, forestry and fishery sectors. Manufacturing and trade have remained resilient and continue to lead the recovery, while the domestic sector has remained relatively muted despite seeing incremental improvements.

On the back of base effects and more favourable price developments vis-à-vis commodity prices and currency moves, inflation has shown notable moderation recently.

Vietnam has continued to attract foreign investment as fundamental prospects remain positive. Although growth in newly registered funding from abroad moderated in the third quarter, with sectors beyond manufacturing such as real estate and energy seeing increases.

Looking ahead, manufacturing inflows are also likely to remain resilient, with Party General Secretary, State President To Lam’s recent visit to the United States yielding investment intentions from various groups such as Meta. Continued efforts to deepen ties with international partners will also act as a tailwind for further investment inflows, with Vietnam recently upgrading relations with France to a comprehensive strategic partnership.

Given the better-than-expected growth results in the third quarter, HSBC raises its 2024 GDP forecast to 7 per cent, expecting the recovery to strengthen and broaden out across sectors in the coming quarters. This is the highest growth forecast an international financial organisation has given to Vietnam's economy this year.